Runlayer, a startup specializing in secure Model Context Protocol (MCP) gateways that enable AI models to access external data safely, has filed a lawsuit against HR software company Rippling. According to the complaint, Rippling engaged in a nearly yearlong product trial with Runlayer, during which it gained extensive insight into Runlayer’s product roadmap, source code, and engineering details under a non-disclosure agreement forbidding replication. After failing to reach a pricing agreement, Runlayer alleges that Rippling launched a similar MCP gateway by misappropriating Runlayer’s intellectual property.

The dispute underscores challenges in enterprise AI infrastructure sales, particularly when selling complex technology to tech-savvy companies capable of building their own solutions. Runlayer’s lawsuit claims Rippling’s product is essentially a copy of its technology, constituting unfair competition, trade secret theft, and breach of contract. Rippling has acknowledged its MCP gateway launch but denied any wrongdoing, asserting its product is developed solely with proprietary information and dismissing Runlayer’s claims as attempts to evade competition.

Runlayer’s engagement of the prestigious law firm Sullivan & Cromwell signals the seriousness of the case, although the outcome remains uncertain. This legal battle highlights the difficulties startups face in protecting their innovations when sharing proprietary technology with potential enterprise clients for evaluation, especially given the lengthy and collaborative nature of enterprise sales cycles. MCP gateways have become critical tools for AI interoperability, and competition in this space has intensified since Runlayer’s product debut in late 2025 and its $42 million funding round from top-tier venture investors.

The case also reflects the broader trend of growing demand for secure AI integrations in enterprise settings, alongside the risks startups encounter when navigating deals with larger, resource-rich companies. Runlayer’s experience serves as a cautionary example of balancing openness during trials with safeguarding intellectual property, crucial in a sector where rapid innovation and competitive pressures are converging. As the MCP gateway market matures, how such disputes are resolved could impact future collaborations between emerging AI infrastructure companies and established enterprises.