Rippling Counters Startup's Lawsuit, Alleges Counter-Infringement

HR software company Rippling has filed a countersuit against AI startup Runlayer, alleging that Runlayer infringed upon its patents and misappropriated intellectual property. This legal battle stems from Runlayer's earlier lawsuit accusing Rippling of stealing trade secrets.

Rippling's complaint, filed in the US District Court for Delaware, states that Runlayer's platform infringes on Rippling's patents and has "free-ridden" off its decade of development. The company claims this has resulted in lost sales and customers for Rippling.

In its own filings, Rippling denied Runlayer's accusations that it built a "clone" of the startup's safety and governance product during a commercial partnership. A spokesperson for Rippling stated that Runlayer's lawsuit is a "desperate, retaliatory ploy to distract from the fact Rippling misappropriated our proprietary technology," adding that Runlayer is facing a lawsuit for repeatedly copying Rippling's inventions.

Runlayer's initial lawsuit alleged that discussions between the two companies dissolved when Rippling refused to pay market rate for its platform, while secretly developing a copycat product using Runlayer's confidential information. Runlayer claimed it was alerted to this by an insider at Rippling who texted the CEO that the company was building a "1 to 1 copy" of Runlayer's product, specifically an MCP Gateway designed to govern AI models.

However, the employee identified as the source of the text message, an engineer at Rippling named Tim Fall, has stated in a declaration that his messages were misinterpreted. Fall clarified that upon seeing Rippling's MCP Gateway, he determined it was not a clone and did not copy Runlayer's product. He also expressed disappointment that Runlayer disclosed his messages without his permission and without contacting him to understand their context. Fall further stated he does not recall receiving any source code or system architecture details for Runlayer's MCP Gateway during their business relationship.

Rippling argues that with Fall's text message "debunked," Runlayer's case lacks merit, asserting there is no evidence that Runlayer shared trade secrets with Rippling or that Rippling used any such secrets.