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MCP startup Runlayer accuses Rippling of stealing its product idea
Runlayer, a startup providing a secure Model Context Protocol (MCP) gateway for AI systems, has filed a lawsuit accusing HR software firm Rippling of stealing its product idea and trade secrets after an extended sales trial. Runlayer alleges that during nearly a year of "intensive engineering collaboration," it shared its product roadmap and source code with Rippling under a non-disclosure agreement, only for Rippling to later build what it describes as a near-identical clone once price negotiations broke down. The case highlights the risks faced by smaller AI infrastructure vendors when pitching to larger, well-resourced tech companies capable of building similar products in-house.
According to the complaint, Runlayer's founder and chief executive, Andrew Berman, was reportedly tipped off by a "Rippling insider" about an internal project to replicate the startup's product almost exactly. Runlayer is pursuing claims of trade secret misappropriation, unfair competition and breach of contract, and has hired law firm Sullivan & Cromwell. Rippling has confirmed it is launching its own MCP gateway but denies misusing Runlayer's intellectual property, calling the lawsuit an attempt to deflect from business struggles. Runlayer, which launched in mid-2025 and has raised $42 million from investors including Khosla Ventures and Felicis, operates in an increasingly crowded market for MCP gateway tools built around Anthropic's open-source protocol, launched in November 2024.
In short
- Runlayer sues Rippling, alleging it copied its MCP gateway product.
- Trial involved a year of collaboration and shared source code under NDA.
- Rippling denies wrongdoing, says it's launching its own superior product.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Runlayer shared sensitive product roadmap and source code under NDA during nearly a year of intensive collaboration with Rippling. An internal Rippling source reportedly revealed the company was building an almost identical clone, and the timing—product launch immediately following failed price negotiations—strongly suggests deliberate misappropriation rather than coincidental parallel development. Larger companies have substantial incentive and capability to exploit such access, which is precisely why NDA and trade secret protections exist for smaller vendors.
The case against
MCP gateways represent an obvious product category following Anthropic's open-source protocol launch, and independent parallel development is entirely plausible in a nascent, crowded market where multiple vendors are pursuing similar technical solutions to address the same market need. Rippling's engineering team could have identified equivalent customer problems and arrived at comparable architecture independently without using Runlayer's materials. Contesting allegations through the legal process is appropriate and standard practice; Runlayer may be conflating predictable market competition with misconduct.
Explained simply
The Model Context Protocol is a technical standard for how artificial intelligence systems safely access tools and data. Since its launch last year, companies have begun offering services that sit between AI systems and company information, controlling what gets shared.
Runlayer is a young startup founded in 2025 that offers such services, whilst Rippling is an established software company specialising in HR and IT management for businesses. The two engaged in lengthy discussions about a potential partnership, during which Runlayer shared detailed information about its product and plans.
Runlayer now alleges that Rippling used the technical information it shared to develop its own competing product instead of purchasing Runlayer's services. The case highlights a challenge for smaller tech startups: larger, well-resourced companies can sometimes afford to develop their own version of a product after seeing how it works, leaving startups with limited options apart from legal action.
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