In the latest episode of 'Tech Companies Behaving Like Territorial Cats,' HR software giant Rippling has filed a lawsuit against MCP gateway startup Runlayer, accusing it of infringing on three patents. The lawsuit, filed Monday and seen by TechCrunch, is the corporate equivalent of a playground shoving match that started when Runlayer sued Rippling last month for breach of contract and allegedly stealing its product ideas.

This saga began when Rippling spent nearly a year testing Runlayer's MCP product. The two companies, apparently unable to agree on a price, never signed a contract. Instead, Rippling decided to build its own MCP server, which it will soon offer as a competing product. Because why pay for something when you can just build it yourself? Rippling has a history of this, turning internal tools into products, like its recently released AI Spend Console.

Runlayer, which launched about a year ago, bundles an MCP gateway with cybersecurity features like threat detection. MCP, for the uninitiated, is an open standard that lets AI agents connect to data and software systems. Runlayer has raised $42 million and is led by three-time founder Andrew Berman, whose previous ventures include baby-monitor maker Nanit and AI video conferencing tool Vowel (sold to Zapier in 2024). Rippling was one of Runlayer's earliest potential customers, and now they're at each other's throats.

The lawsuit includes some juicy details. Runlayer claims a Rippling employee warned Berman that his employer was building a 'copy' of Runlayer's product. A Rippling spokesperson says the employee has since 'revised that view,' which is corporate-speak for 'we told them to shut up.' Rippling, meanwhile, claims it informed Runlayer of the patents it believed were infringed soon after Runlayer filed its own lawsuit. Because nothing says 'we're confident in our legal position' like waiting until the last minute.

Runlayer sees the suit as a desperate, retaliatory ploy. Berman said in a statement: 'This is a desperate, retaliatory ploy to distract from the fact Rippling misappropriated our proprietary technology. We clearly have a standout AI product that has nothing to do with these patents. No attempt to bully or distract will prevent us from protecting our IP and continuing to innovate and create the best product for our fast-growing customer base.'

Rippling's spokesperson fired back: 'It takes a certain boldness to accuse a competitor of violating intellectual property laws while infringing on that competitor's inventions. But that's exactly what Runlayer has done here. Rippling's lawsuit calls out Runlayer's hypocrisy. Having manufactured claims against Rippling to distract from its business failures, it now has to face a lawsuit for repeatedly copying Rippling's inventions in building its own products.'

Now it's up to the courts to untangle this mess, unless the parties settle. But this dueling lawsuit saga serves as a buyer- and seller-beware warning. With AI advances, enterprises are more empowered than ever to build tech in-house. Yet they might still put a startup through its paces before choosing that option, leaving the startup with a legal headache and a warning to always read the fine print.