Rippling sued Runlayer for patent infringement on August 10, turning a startup trade-secret fight into a two-court brawl over who owns the plumbing that lets AI agents touch company data.
Rippling moved fast. Runlayer sued first in the Southern District of New York on July 28, accusing the HR software company of using a nearly year-long product trial to study its AI agent security platform and then build a rival. Thirteen days later, Rippling hit back in Delaware with its own patent suit, according to the New York Post.
Runlayer's complaint, first reported by TechCrunch and also distributed through PR Newswire, lays out a blunt story. The startup says Rippling signed a mutual non-disclosure agreement, ran a paid trial, saw Runlayer's roadmap and source code, and then walked away after the two sides couldn't agree on price. A Rippling insider allegedly texted Runlayer CEO Andrew Berman that there was an internal project to build "essentially a clone" of Runlayer and that it was "almost a 1 to 1 copy."
Rippling says that is wrong. A spokesperson told TechCrunch that Runlayer's suit was "a panicked effort to avoid competition by fabricating claims" and said Rippling was launching its own MCP gateway using only its own proprietary information. In the countersuit reported by the New York Post, Rippling accused Runlayer of infringing its patented technology and misappropriating its intellectual property. Both sides are now calling the other side a thief.
That's the fight.
The startup is small, but the market is not #
Runlayer builds security and monitoring infrastructure for the Model Context Protocol, the open source standard Anthropic introduced in November 2024 so AI agents can connect to outside tools and data. If you're selling AI infrastructure into a large company, this is exactly where the trust problem lives. The agent needs access. The company needs control.
TechCrunch reported that Runlayer launched out of stealth on November 17, 2025 with $11 million in seed funding from Khosla Ventures' Keith Rabois and Felicis. The company said in June that it had raised a $30 million Series A led by Felicis, with Khosla Ventures participating, bringing total funding to $42 million. Its customers have included Gusto, dbt Labs, Instacart and Opendoor, and Runlayer's own site now lists Decagon, Lemonade, PagerDuty and Jane alongside several of those names.
Rippling sits on a different scale entirely. The company announced a $450 million Series G and tender offer in May 2025 at a $16.8 billion valuation. CNBC has since reported that Rippling crossed roughly $1 billion in annual recurring revenue, with growth near 78% year over year. When a company that size tells a younger vendor it can build the tool itself, you don't need much imagination to see why the smaller company runs to court.
Frankly, that is the risk every enterprise AI vendor has to price in now. A trial is supposed to help a customer test the product. It can also become a tour of the kitchen.
Rippling already knows this kind of fight #
This isn't the only ugly lawsuit around Rippling. The company is also suing rival Deel in federal court in California, alleging corporate espionage. According to court records in People Center, Inc. v. Deel, Inc., Rippling claims Deel CEO Alex Bouaziz hired Rippling employee Keith O'Brien to act as a corporate spy in exchange for cryptocurrency payments and send Deel confidential information from Rippling's systems.
That case has its own strange details. Court filings describe a Rippling "honeypot" letter, an Irish court order, and allegations that O'Brien hid in a bathroom to delete evidence before later signing a cooperation agreement. Bloomberg Law reported in February that Judge Charles Breyer said Rippling's suit could move forward, including trade secret and racketeering allegations. Deel denies Rippling's claims and has filed counterclaims of its own.
So Rippling knows exactly how damaging a trade-secret allegation can be. It has spent more than a year arguing that stolen internal data can distort competition in HR software. Now Runlayer is making a related argument against Rippling in AI infrastructure, while Rippling is answering with patents and its own claims of misappropriation.
There is a broader pattern here, but don't make it cleaner than it is. Apple sued OpenAI in July, according to Reuters and TechCrunch, alleging that OpenAI and former Apple employees misappropriated hardware trade secrets. xAI sued OpenAI in September 2025, with Reuters reporting that Elon Musk's company accused OpenAI of hiring away workers to get access to Grok-related source code and business plans. Scale AI sued Mercor the same month, alleging a former employee took more than 100 confidential documents, according to TechCrunch and Bloomberg Law.
None of those cases proves Runlayer is right, or that Rippling is. They do show that AI companies are no longer fighting only over models, talent and customers. They are fighting over the workbench: source code, connectors, gateways, logs, permissions, roadmaps, supplier details, and anything else that shows how a product actually works.
For founders, the warning is plain. If your product becomes important enough, the trial room can become a battlefield. Runlayer and Rippling now have two courts, two sets of accusations, and no quick ruling on the core claims. The only certain thing is that the AI agent market is young and expensive. It's already lawyered up. Also read: Unitree's IPO Drew 9.8 Million Bids for Just 9.7 Million Shares • Razer and NUS Open a Joint AI Lab to Build Project AVA's Brain • Anthropic Now Watermarks Every Sentence Claude Writes, Even After Editing