Rippling Sues Runlayer for Patent Infringement as AI Startup Legal Fight Escalates

HR software company Rippling has sued AI infrastructure startup Runlayer, accusing the company of infringing three patents and opening a new front in an increasingly contentious legal dispute between the two businesses.

Rippling filed the lawsuit Monday, about two weeks after Runlayer brought its own case against the HR technology company. Runlayer’s lawsuit accuses Rippling of breach of contract and misappropriating its technology and product ideas.

Rippling and Runlayer dispute follows lengthy MCP trial

The conflict grew out of a business relationship that began when Rippling became an early prospective customer of Runlayer. Rippling spent nearly a year testing the startup’s Model Context Protocol, or MCP, product. Still, the companies ultimately failed to reach an agreement on pricing, and the trial did not become a paid contract.

Rippling subsequently developed its own MCP server and plans to offer the technology as a product that will compete with Runlayer. Developing products from technology originally built for internal use is not unusual for Rippling. The company recently followed a similar approach with its AI Spend Console.

Runlayer launched its product about a year ago. Its offering combines an MCP gateway with cybersecurity capabilities such as threat detection. MCP is an open standard that enables AI agents to connect with software systems and data they need to perform tasks.

The startup has raised $42 million and was founded by Andrew Berman, a third-time founder. His previous companies include baby-monitor maker Nanit and AI video conferencing company Vowel, which was acquired by Zapier in 2024.

Both companies make intellectual property allegations

One ofRunlayer’ss most notable allegations concerns a Rippling employee who allegedly contacted Berman and warned him that Rippling was developing a “copy” of Runlayer’s product.

Rippling has responded with intellectual property allegations of its own. The company says Runlayer infringed three Rippling patents and claims it notified Runlayer about the patents shortly after the startup filed its lawsuit.

Runlayer views the new patent case as retaliation rather than a legitimate response to its allegations.

“This is a desperate, retaliatory ploy to distract from the fact Rippling misappropriated our proprietary technology,” Berman said in a written statement.

Berman said Runlayer’s AI product was unrelated to the patents cited by Rippling and maintained that the company would continue defending its intellectual property.

Rippling rejected that characterisation and accused Runlayer of copying its inventions while simultaneously pursuing intellectual property claims against Rippling.

“It takes a certain boldness to accuse a competitor of violating intellectual property laws while infringing on that competitor's inventions,” a Rippling spokesperson said.

The spokesperson said Rippling’s lawsuit was intended to address what the company considers repeated copying of its inventions. The competing allegations have not been resolved in court.

AI development adds another dimension to customer relationships

The dispute illustrates a potential complication in relationships between enterprise customers and technology startups. A prospective customer can spend months evaluating astartup’ss product before ultimately deciding not to buy it, while advances in AI and software development are making it easier for established companies to build more technology internally.

That dynamic can become particularly sensitive when the customer later launches a product competing with technology it previously evaluated. In this case, Runlayer alleges that Rippling improperly used its technology and ideas, while Rippling maintains that Runlayer itself infringed inventions protected by Rippling patents.

The courts will now have to evaluate the competing claims unless Rippling and Runlayer settle. Until then, their dispute provides a closely watched example of how product evaluations, internal development and intellectual property conflicts can collide as companies race to build AI infrastructure.