Runlayer and Rippling drop lawsuits over AI gateway product without settlement

Runlayer and Rippling dropped their respective lawsuits against each other without any settlement, monetary payment, or exchange of lawyers’ fees, according to court documents reviewed by TechCrunch. Rippling marked the end of the legal dispute by releasing its own MCP gateway, a product that directly competes with Runlayer’s offering. The MCP gateway securely handles enterprise AI agent requests for data from other software systems, such as retrieving candidate details for hiring professionals from recruitment systems.

The legal conflict began after Rippling tested Runlayer’s MCP gateway for over a year through close collaboration between the two engineering teams. Runlayer alleged in its lawsuit that Rippling never intended to become a customer and instead planned to build and release a competing product. A Rippling employee reportedly described the planned product as a clone of Runlayer’s gateway, prompting Runlayer to file suit claiming violations of contractual agreements covering the testing period.

Rippling responded with a countersuit, alleging that Runlayer violated some of its patents. Runlayer characterized the countersuit as an attempt to pressure it into dropping its case while increasing Runlayer’s legal expenses. After three weeks in discovery, Runlayer dropped its lawsuit. Rippling also dropped its countersuit without pursuing a settlement.

The dispute underscores the evolving nature of the AI tools market, where enterprises with long testing cycles may rapidly transition from prospective customers to direct competitors. Rippling, historically focused on payroll and benefits management, entered the AI gateway market with a product that routes to different AI models and provides dashboarding for token spend by employee. The product competes with offerings from Stripe, Ramp, and Databricks, as well as in AI security with tools from Runlayer, Docker, and Amazon Bedrock.