Runlayer and Rippling drop suits: your pilot is a spec
The first MCP gateway lawsuit ended with no money and a competing launch the same day. What a year-long unpaid pilot really hands your prospect.
Runlayer and Rippling walked away from their duelling lawsuits this week — no settlement, no money, not even legal fees — and Rippling marked the occasion by launching the MCP gateway that started the fight. If you sell software, or buy it, the useful part of this story is not the litigation. It is what a year-long unpaid pilot teaches a well-funded prospect about how to build your product.
What actually happened
TechCrunch reports that both companies dismissed their claims on Wednesday, with court filings showing no payment either way.
The sequence, per TechCrunch's reporting across three stories: Rippling tested Runlayer's MCP gateway for more than a year, with the two engineering teams working closely together. Rippling never became a paying customer. Runlayer founder Andrew Berman then learned Rippling planned to ship its own version. Runlayer sued in late July, claiming breach of the agreements covering those tests. Rippling countersued in August alleging patent infringement — read by observers as a cost-escalation move against a smaller opponent.
Runlayer has raised $42 million, including from Khosla Ventures' Keith Rabois and Felicis, and came out of stealth in November 2025. Rippling's new gateway routes requests across models, tracks token spend, and ties AI access to employee roles.
No court decided anything. Both sides paid their lawyers and Rippling shipped.
Why a long pilot is a risk your business should price
Two lessons, depending on which side of the table you sit on.
If you sell: an extended evaluation with deep engineering access is a specification handed to a company that can staff it. That used to be an acceptable trade because building the thing was hard. It is less hard now. Cap the pilot at weeks, not quarters. Charge for it — a paid pilot changes the relationship and the paperwork. Keep your differentiated logic behind an API rather than walking a prospect's engineers through it. And understand that an NDA is only worth what you can afford to enforce; Runlayer had $42 million behind it and still chose to stop.
If you buy: MCP gateways — the layer that decides which model gets a request, what it may touch, and who pays for the tokens — are now table stakes inside platforms you already run. That is good for your bill and bad for your leverage. When the gateway ships inside your payroll vendor, your model routing and your role-based AI permissions live wherever your HR contract lives. Keep the routing interface portable so the day you leave the platform, you keep the plumbing.
Key takeaways
- Runlayer and Rippling dismissed both suits this week with no settlement and no fees, per court filings reviewed by TechCrunch
- Rippling launched the competing MCP gateway immediately after — routing across models, token spend tracking, role-based AI access
- Rippling had tested Runlayer's product for over a year without becoming a paying customer
- Runlayer raised $42M and still chose to drop the case: litigation is not a moat for a small vendor
- Cap pilots, charge for them, and keep your differentiated logic behind an API
Your AI gateway should not be a feature of your payroll vendor. We build model routing and agent permissioning that lives in your stack, so switching platforms does not mean rebuilding how your agents get access. See how we architect AI systems, or look at what we've shipped.
Sources: TechCrunch — lawsuits dropped, TechCrunch — original complaint, TechCrunch — countersuit.
- #mcp
- #vendor-risk
- #startups
- #ai-agents
- #contracts
Tommy Rush — Founder, Rush Commerce
Operator turned builder. 15+ years running operations — now shipping the systems businesses run on. More
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