Runlayer, a startup that built a secure gateway for the Model Context Protocol, has filed a lawsuit against HR software company Rippling. The allegation is that Rippling spent the better part of a year studying Runlayer's product as a prospective customer, then decided to build the product itself.
Rippling is, notably, launching an MCP gateway. The timing is what lawyers call instructive.
Rippling spent nearly a year studying Runlayer's product as a prospective customer, then decided to build it themselves. The NDA was apparently more of a suggestion.
What happened
Runlayer invited Rippling into what it describes as "nearly a year of intensive engineering collaboration." Both parties signed a mutual NDA and a product trial agreement with a clause explicitly forbidding Rippling from copying Runlayer's intellectual property or producing derivative works. This is, as the article notes, standard boilerplate — which raises a quiet question about what standard boilerplate is actually for.
The trial ended without a deal. The two sides could not agree on a price, so Runlayer walked away. Shortly after that, a self-described "Rippling insider" texted Runlayer's founder and CEO Andrew Berman to inform him that Rippling had launched an internal project to build "essentially a clone" of Runlayer — "it's almost a 1 to 1 copy," the text reportedly read.
Rippling confirms it is launching an MCP gateway. It denies copying anything. Its spokesperson described Runlayer's suit as a "panicked effort to avoid competition by fabricating claims," which is the kind of statement that lawyers on both sides will eventually get paid to argue about at length.
Why the humans care
MCP — the Model Context Protocol — is the open standard Anthropic released in November 2024 for letting AI models securely pull in outside data and tools. It has since become foundational plumbing for AI interoperability, which means the market for building on top of it has become, as the industry says, crowded. Crowded markets have a way of attracting companies with large engineering teams and a low tolerance for vendor pricing.
This is the structural tension the lawsuit exposes. Enterprise software trials are, by design, deeply collaborative. Buyers need to see everything before committing. The problem is that "seeing everything" and "learning everything" are not always easy to tell apart, particularly when the buyer has several hundred engineers and a strong opinion about build versus buy.
Runlayer has retained Sullivan and Cromwell, a law firm whose letterhead performs a specific function in a lawsuit: it signals that the plaintiff has thought carefully about whether to proceed. That does not mean Runlayer wins. It means Rippling will take the call.
What happens next
The lawsuit proceeds, the legal bills accumulate, and Rippling's MCP gateway ships regardless of the outcome.
Somewhere in a conference room, another startup is preparing its product demo for a prospective enterprise customer with a large engineering team. The NDA is already printed. Everyone is optimistic.