A small startup focused on securing AI connections is taking on a much larger HR software company in court, alleging that a year-long product trial ended with its intellectual property being copied. Runlayer, which builds a secure gateway for the Model Context Protocol (MCP), has filed a lawsuit against Rippling, according to a complaint seen by TechCrunch. The case reveals the high-stakes risks that smaller vendors face when sharing sensitive technical details with potential enterprise customers that have the resources to build competing products internally. Main Developments Runlayer alleges that during an extensive product evaluation, Rippling gained access to its product roadmap, source code, and other proprietary information under a mutual non-disclosure agreement. A product trial agreement included a standard clause prohibiting Rippling from copying Runlayer's intellectual property or creating derivative works. After nearly a year of intensive engineering collaboration, the two companies failed to agree on pricing, and Runlayer ended the trial. Shortly afterward, Runlayer founder and CEO Andrew Berman received a text from a Rippling insider claiming the company was internally building what the message described as "essentially a clone of Runlayer — it's almost a 1 to 1 copy." Read also: Why Ozlo Sleepbuds 2 matters more than Bose's legacy Rippling has confirmed to TechCrunch that it is launching its own MCP gateway but denies any misuse of Runlayer's IP. A Rippling spokesperson dismissed the lawsuit as "Runlayer's panicked effort to avoid competition by fabricating claims," adding that Rippling's product uses only its proprietary information. Background Runlayer launched its MCP gateway product in mid-2025 and has raised $42 million from investors including Khosla Ventures and Felicis. The MCP protocol was introduced by Anthropic as an open-source standard in November 2024, offering a way for AI models and agents to securely access external data sources and services. Runlayer's product adds layers of control, security, and agent management on top of the basic protocol. The market for such gateways has grown increasingly competitive since the startup's launch, with multiple companies now offering similar infrastructure. The lawsuit, filed in an unspecified court, accuses Rippling of trade secret misappropriation, unfair competition, and breach of contract. Runlayer has retained the law firm Sullivan & Cromwell, a prominent firm that lends the case some credibility, according to observers, though legal experts note that retaining a marquee firm does not guarantee a favorable outcome. Why It Matters The case highlights a fundamental tension in enterprise software sales, particularly for AI infrastructure. Selling complex tools to other tech companies often requires deep, hands-on trials that can stretch for months or even years. The process demands that startups reveal their most valuable intellectual property to potential customers who may have the engineering talent and incentive to build their own versions. Both sides face difficult positions: startups risk losing their competitive edge, while enterprises may legitimately need to evaluate products thoroughly before committing. The lawsuit serves as a cautionary tale for any company selling AI infrastructure to well-resourced tech firms. What's Next The legal battle will now proceed through the courts, with Rippling denying the allegations and Runlayer seeking to prove that its IP was misappropriated. The outcome could set a precedent for how product trial agreements are enforced in the AI sector, particularly when the customer has the capability to build competing products. Beyond the courtroom, the case may prompt other startups to reconsider how much access they grant during enterprise evaluations. The growing MCP gateway market will likely see continued competition regardless of the lawsuit's outcome.