Runlayer, a startup building a secure gateway for AI agents, filed a lawsuit against HR software company Rippling on July 28, 2026, alleging trade secret theft, unfair competition, and breach of contract. The complaint, reviewed by TechCrunch, accuses Rippling of using nearly a year of intensive engineering collaboration under a product trial agreement to clone Runlayer's core product rather than license it (TechCrunch).

To understand the dispute, it helps to know what Runlayer actually builds. AI agents and large language models are powerful on their own, but they become far more useful when they can reach outside data and tools. MCP, or Model Context Protocol, is an open-source standard that Anthropic released in November 2024 to give AI models a consistent way to do exactly that. Runlayer's product is a gateway that sits between AI agents and those external resources, managing the connection securely. The company, founded and led by CEO Andrew Berman, has raised $42 million from investors including Khosla Ventures and Felicis.

According to the complaint, Runlayer and Rippling signed a mutual non-disclosure agreement (NDA) and a product trial agreement that explicitly barred Rippling from copying Runlayer's intellectual property or creating derivative works. The evaluation reportedly spanned close to a year and involved deep engineering collaboration between the two companies' technical teams. When the parties could not agree on pricing, Runlayer terminated the trial.

Runlayer alleges that a Rippling insider subsequently texted Berman to warn him about an internal Rippling project to build a clone of Runlayer's gateway. The lawsuit hinges on whether Rippling's own MCP product draws on proprietary information obtained during the trial period or was developed independently.

Rippling has confirmed to TechCrunch that it is launching its own MCP gateway. A Rippling spokesperson denied the IP misuse allegations, stating the company is building the product using only its proprietary information.

Runlayer has retained Sullivan & Cromwell for the litigation, signaling a serious legal commitment to the dispute.

The dispute lands at an intersection of two dynamics the industry is still working through. MCP was open-sourced by Anthropic in November 2024 as a protocol standard, and the ecosystem around it has grown quickly. But a protocol specification and a production-grade gateway built on that protocol are different categories of intellectual property. Runlayer's claim is not that Rippling used the open protocol; it is that Rippling used proprietary implementation details, architectural decisions, and integration patterns disclosed under NDA during an extended evaluation period.

The broader context here is a familiar risk pattern for startups building infrastructure on top of emerging open standards. A potential customer requests a deep technical evaluation, engineering teams collaborate for months, deal terms fall through, and the larger company ships a similar product. Whether that sequence constitutes independent development, legitimate competition, or misappropriation is precisely what the court will need to sort out. The NDA and trial agreement terms, the substance of what was shared during the collaboration, and the timeline of Rippling's internal development will be the contested facts.

Rippling's denial is straightforward: the product uses only its own proprietary information. If the case proceeds to discovery, the burden will shift to demonstrating what specific information crossed the NDA boundary, how it was used, and whether the resulting product bears traces that cannot be explained by independent engineering on a public protocol.

The MCP gateway market is early enough that the outcome could shape how larger vendors approach smaller protocol-layer startups for evaluation partnerships. Startups in this space are simultaneously pitching potential customers and potential competitors, often the same entity. The Runlayer dispute may accelerate the adoption of more restrictive evaluation terms, staged disclosure models, or technical measures like API rate-limiting and abstraction layers that limit what a trial partner can reverse-engineer.

The case also puts a spotlight on the MCP ecosystem's maturation. Anthropic released the protocol less than two years ago. Companies are now raising tens of millions of dollars to build commercial infrastructure around it, and incumbents with adjacent product lines are moving to offer their own gateways. Friction between infrastructure startups and platform companies was predictable. What remains unresolved is whether the legal frameworks startups rely on, NDAs and trial agreements, are sufficient when the product being evaluated is a thin layer on top of a public protocol and the evaluating partner has the engineering capacity to rebuild it.

Runlayer's decision to litigate, backed by Sullivan & Cromwell, indicates the company views the disclosure during the trial period as substantive enough to support a trade secret claim. Rippling's counter-position is that an MCP gateway can be built independently on the open protocol without reference to a partner's implementation. The court will eventually weigh the specifics. For the broader MCP and AI infrastructure community, the dispute is an early stress test of how trust, collaboration, and IP protection function in a market segment that did not exist 24 months ago.