HR software company Rippling filed a lawsuit on Monday alleging that MCP gateway startup Runlayer infringed three of its patents, according to court filings reviewed by TechCrunch.
The filing follows Runlayer’s lawsuit against Rippling last month, in which Runlayer accused Rippling of breach of contract and misappropriating its product ideas. The new complaint continues a months-long dispute between the two companies.
Background: trial but no paid contract
The companies spent nearly a year with Rippling trialing Runlayer’s MCP product. That trial did not result in an agreement on price, and no paid contract was executed. After the trial, Rippling developed its own MCP server and plans to offer it commercially, positioning it as a competitor to Runlayer. Rippling has a history of productizing internally used technology, such as its recently released AI Spend Console.
What is MCP and Runlayer’s offering?
MCP (Model-Connector Protocol) is an open standard that enables AI agents to connect to the data and software systems they need to operate autonomously. Runlayer launched its product about a year ago and packages an MCP gateway together with cybersecurity features like threat detection.
Runlayer was founded by Andrew Berman, a third-time founder whose earlier companies include baby-monitor maker Nanit and the AI video conferencing company Vowel; Vowel was acquired by Zapier in 2024. Runlayer has raised a total of $42 million, and Rippling was one of the startup’s earliest trialing customers.
The disputed claims
Both companies have leveled serious accusations against each other. Runlayer’s complaint includes an allegation that a Rippling employee contacted Andrew Berman to warn that Rippling was building a “copy” of Runlayer’s product. A Rippling spokesperson told TechCrunch that the employee later revised that view.
Rippling says it informed Runlayer about the patents it believed were being infringed shortly after Runlayer filed its suit.
Statements from both sides
Andrew Berman, in a written statement, described Rippling’s suit as “a desperate, retaliatory ploy to distract from the fact Rippling misappropriated our proprietary technology.” He added that Runlayer has “a standout AI product that has nothing to do with these patents” and that attempts to bully or distract will not prevent Runlayer from protecting its intellectual property and continuing to innovate for its rapidly growing customer base.
A Rippling spokesperson responded to TechCrunch: “It takes a certain boldness to accuse a competitor of violating intellectual property laws while infringing on that competitor’s inventions. But that’s exactly what Runlayer has done here. Rippling’s lawsuit calls out Runlayer’s hypocrisy. Having manufactured claims against Rippling to distract from its business failures, it now has to face a lawsuit for repeatedly copying Rippling’s inventions in building its own products.”
What’s next
Unless the parties reach a settlement, the courts will determine the merits of the competing claims. The dual lawsuits also underline a broader lesson for buyers and startups: rapid advances in AI make it easier for enterprises to develop in-house solutions, yet piloting a startup’s product before committing to purchase can still lead to disputes when trials do not convert into commercial agreements.
