Rippling counter-sues Runlayer in escalating patent fight

HR startup Rippling filed a lawsuit Monday accusing MCP gateway startup Runlayer of infringing on three of its patents, according to the lawsuit seen by TechCrunch. The filing comes after Runlayer sued Rippling last month, accusing it of breach of contract and stealing its product ideas.

The countersuit is the latest turn in a dispute that began after Rippling spent nearly a year testing Runlayer’s MCP product. The two companies never agreed on a price, and the trial never turned into a paid contract. Instead, Rippling built its own MCP server, which it will soon sell as a product competing directly with Runlayer.

Runlayer, which launched its product about a year ago, bundles 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 a total of $42 million and was founded by third-time founder Andrew Berman, whose earlier companies were baby-monitor maker Nanit and AI video-conferencing tool Vowel, which sold to Zapier in 2024. Rippling was one of Runlayer’s earliest potential customers.

The most dramatic detail in Runlayer’s lawsuit is its 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 says the employee has since revised that view. On Rippling’s side, the company says it informed Runlayer of the patents it believed had been infringed soon after Runlayer filed its own suit — a sequence that suggests the countersuit could be leverage toward a settlement.

“This is a desperate, retaliatory ploy to distract from the fact Rippling misappropriated our proprietary technology,” Berman said in a written statement, adding that Runlayer will keep “protecting our IP and continuing to innovate.” Rippling’s spokesperson countered that Runlayer’s own suit was manufactured “to distract from its business failures.”

Why it matters

The case is a warning for how fast a customer-vendor relationship can sour when an enterprise trials a startup’s product, builds its own version in-house, and then launches a competing offering.