Runlayer and Rippling Drop Rival MCP Gateway Lawsuits
Runlayer’s dispute with Rippling centered on software built around the Model Context Protocol, or MCP, which lets AI systems connect with corporate data and tools. Runlayer alleged that Rippling tested its MCP gateway and then introduced a competing product, prompting claims involving breach of contract and copying. Rippling filed claims of its own. The clash highlighted a growing risk for AI startups: cheaper, faster software development can allow a prospective customer to become a direct rival.
Runlayer and Rippling have now voluntarily dismissed their lawsuits against each other without conditions, ending the MCP gateway dispute without a court ruling on the underlying allegations. Neither company will pay a settlement or reimburse the other side’s legal fees. Although the litigation has closed, the episode remains a cautionary case for founders sharing product access, demonstrations or technical details with potential customers, underscoring the importance of confidentiality terms, access controls and clearly defined limits on competitive use.
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The history behind this eventRunlayer Accuses Rippling of Copying Its MCP Gateway
Runlayer sells a secure Model Context Protocol gateway that lets AI models and agents connect to external corporate data and tools while adding controls and governance. The market has grown more crowded since Anthropic released MCP as an open-source protocol in November 2024. Runlayer, which launched its product in mid-2025, has raised $42 million from investors including Khosla Ventures and Felicis, making the dispute a test of how AI infrastructure startups protect intellectual property during lengthy enterprise evaluations.
Runlayer said in a lawsuit disclosed July 28, 2026, that Rippling obtained its product roadmap and source code during nearly a year of engineering collaboration under a mutual nondisclosure agreement and a trial contract barring copies or derivative works. After price talks failed and Runlayer ended the trial, an alleged Rippling insider told CEO Andrew Berman that the HR software company was building an almost one-for-one clone. Rippling confirmed it is launching an MCP gateway but denied misusing Runlayer's IP, calling the claims fabricated.
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