Rippling countersues Runlayer over patents amid dispute over stolen ideas

HR company Rippling filed a lawsuit Monday accusing MCP gateway startup Runlayer of infringing three of its patents, according to the complaint seen by TechCrunch. The move comes in response to Runlayer's own lawsuit filed last month, which alleged breach of contract and theft of its product ideas.

The conflict escalated after Rippling spent nearly a year trialing Runlayer's MCP product. The two sides never agreed on a price, and the trial never turned into a paid contract. Instead, Rippling built its own MCP server and will soon offer it as a product competing with Runlayer. Rippling often turns its internal tools into commercial products, as it did with the recently released AI Spend Console.

The situation shows how relationships between customers and startups can sour in the age of fast AI-driven product development. Runlayer launched its product about a year ago, bundling an MCP gateway with cybersecurity features like threat detection. MCP is an open standard that lets AI agents connect to the data and software systems they need to work independently.

Runlayer has raised $42 million in total. The company was founded by Andrew Berman, a third-time founder who previously started baby-monitor maker Nanit and AI video conferencing tool Vowel, which was sold to Zapier in 2024. Rippling was one of Runlayer's earliest potential customers trialing its software.

The most striking detail in the lawsuit is Runlayer's claim that a Rippling employee reached out to Berman to warn him that his employer was building a "copy" of Runlayer's product. A Rippling spokesperson told TechCrunch that the employee has since revised that view.

On Rippling's side, the most notable claim is that it informed Runlayer of the patents it believed were infringed shortly after the startup filed its lawsuit. The suit appears designed to pressure Runlayer into settlement talks — and that's exactly how the startup sees it.

"This is a desperate, retaliatory ploy to distract from the fact Rippling misappropriated our proprietary technology. We clearly have a standout AI product that has nothing to do with these patents. No attempt to bully or distract will prevent us from protecting our IP and continuing to innovate and create the best product for our fast-growing customer base," Berman said in a written statement.

Rippling also enjoys a good war of words. Its spokesperson told TechCrunch: "It takes a c..." — though the full statement was not disclosed.