Rippling and Runlayer drop suits, pay each other nothing
Two companies spent three weeks in discovery and walked away with no settlement, no damages and not even legal costs. One of them then shipped the product the fight was about.
Runlayer and Rippling withdrew their lawsuits against each other on Wednesday night. No settlement was reached and no money changed hands, not even lawyers' fees, according to court documents seen by TechCrunch.
Rippling then released its MCP gateway, the product at the centre of the case and a direct competitor to Runlayer's.
Runlayer came out of stealth in November 2025 and has raised $42 million, from investors including Keith Rabois at Khosla Ventures and Felicis. It is led by Andrew Berman, a third-time founder whose previous companies include the baby monitor maker Nanit and Vowel, an AI video conferencing tool sold to Zapier in 2024.
The dispute began with a long evaluation. Rippling tested Runlayer's gateway for more than a year, with both engineering teams working closely together, and never became a customer, according to Runlayer's lawsuit.
Berman then received a text from a Rippling employee saying his employer was building its own MCP gateway and intended to sell it. The employee described that product as a clone of Runlayer's, according to Runlayer's suit.
Runlayer sued, alleging Rippling had broken the contractual agreements covering the product tests. Rippling countersued, alleging patent infringement.
Runlayer read the countersuit as a lever to make it drop the case while running up legal bills. After three weeks in discovery, Runlayer dropped its suit. Rippling dropped its own and collected nothing.
An MCP gateway sits between a company's AI agents and its other software. When an agent asks for data — the top five candidates for a role, say, with their email addresses — the gateway retrieves it rather than handing the agent direct access, and can apply role-based permissions and usage logging on top.
Rippling's business has historically been payroll and benefits. In the space of weeks it has entered the AI gateway market with a tool that routes between models and reports token spend by employee, competing with Stripe, Ramp and Databricks, and the AI security market with the MCP gateway, competing with Runlayer, Docker and Amazon Bedrock.
Runlayer's pitch is a wider bundle around the gateway, from agent creation to finding shadow AI agents running inside a company without IT's knowledge.
The practical lesson for founders is about the evaluation, not the litigation. A multi-month technical shoot-out with a large enterprise is now long enough for that enterprise's requirements to change, and for building the thing yourself to stop looking hard.
The contract governing a pilot is the only protection in that window, and Runlayer's version of it was worth three weeks of discovery and nothing else. Founders running a year-long trial with a company that could plausibly build the product should price that risk before signing, not after.