A startup specializing in secure Model Context Protocol (MCP) gateways has filed a lawsuit against HR software giant Rippling, alleging the company copied its product after an intensive engineering trial. Runlayer's MCP gateway acts as a secure middleware that allows AI models and agents to connect to external data sources and tools. The suit, seen by TechCrunch, serves as a stark reminder for any company selling specialized AI infrastructure: enterprise customers, especially other tech firms, often have the resources to build a competing product internally.

According to the complaint, Runlayer shared its product roadmap and source code with Rippling during a nearly year-long evaluation, protected by a mutual NDA and a product trial agreement that explicitly banned copying or creating derivative works. Runlayer claims that after the two sides could not agree on pricing and the trial ended, an internal tipster alerted Runlayer's CEO to a project at Rippling that "essentially" cloned Runlayer's offering. The startup now accuses Rippling of trade secret misappropriation, unfair competition, and breach of contract.

Rippling confirmed it is launching its own MCP gateway but denied the allegations. A spokesperson called the lawsuit a "panicked effort to avoid competition" and asserted that Rippling built its product using only proprietary information. The case highlights a common pain point for data and ML engineering teams: selling complex AI infrastructure to tech-savvy enterprises involves deep collaboration, but that same collaboration can open the door to internal builds. With the MCP ecosystem becoming increasingly crowded—Anthropic open-sourced the protocol in late 2024—the risk of losing a prospect to an in-house alternative is higher than ever.

Source: TechCrunch