MCP startup Runlayer accuses Rippling of stealing its product idea; plus, Ozlo’s Sleepbuds 2 build on Bose’s sleep earbud legacy

0:01This is TechCrunch.

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0:50So you can focus on other important things, like savoring that last bit of pumpkin pie. From early startups to Fortune 500 companies, thousands are turning to Framer to build a website they'll love. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com slash tcstartups for 30 % off a Framer Pro annual plan. That's framer.com slash tcstartups for 30 % off. Rules and restrictions may apply. RunLayer is a startup that offers a secure model context protocol gateway, which is a standard for letting AI models and agents securely pull in outside data and tools.

1:34And RunLayer has filed a lawsuit against HR software startup Rippling. That's according to a complaint seen by TechCrunch. The lawsuit is a cautionary tale for anyone selling AI infrastructure to enterprise customers, especially to other tech companies that increasingly have the engineering muscle to just build the thing themselves. In the suit, RunLayer describes an extensive product trial conducted by Rippling as a prospective customer, during which the MCP startup shared everything from its product roadmap to its actual source code. The parties signed a mutual non-disclosure agreement, and Rippling signed a product trial agreement with a clause that forbade it from copying RunLayer's intellectual property or making derivative works, which is, you know, kind of standard boilerplate in enterprise software trials.

2:30RunLayer says in the complaint that Rippling's evaluation involved nearly a year of intensive engineering collaboration, but in the end, the two could not agree on a price. So, RunLayer ended the product trial. Shortly after that, RunLayer alleges that a rippling insider texted RunLayer founder and CEO Andrew Berman to inform him of a project internally to build essentially a clone of RunLayer. It's almost a one-to-one copy of RunLayer. So the company claims in the suit that Rippling's product must have been based on the startup's intellectual property and, therefore, constitutes trade-secret misappropriation, unfair competition, and breach of contract.

3:20Rippling has confirmed to TechCrunch that it is indeed launching its own MCP gateway, though a spokesperson denies RunLayer's allegations about misusing its IP. A Rippling spokesperson told TechCrunch, RunLayer's panicked effort to avoid competition by fabricating claims is not an effective way to deal with its business failures. Rippling is launching a superior product for connecting AI tools to business data using only our proprietary information. We have every reason to win in this market. RunLayer has retained white-shoe law firm Sullivan & Cromwell. That does not mean RunLayer will or even should win this suit, but the same way a marquee VC lends a startup some credibility, a marquee law firm lends a lawsuit some credibility, at least optically.

4:12The more interesting part about this suit is really the inside peek it provides at the trials and tribulations of selling complex AI infrastructure into the enterprise, particularly to other tech companies. Enterprise sales notoriously take a long time to close, often because they hinge on this kind of deep, hands-on trial. MCP gateways in particular are getting crowded. Anthropic launched MCP as an open-source protocol back in November of 2024. It's now one of the basic building blocks of AI interoperability, giving models and agents a secure way to access external data sources and services. MCP Gateway products add control, security, and other features, especially for managing agents, and the field has grown considerably more competitive since RunLayer launched its product in the middle of last year and raised a total of$42 million, including from Koshla Ventures and Felicis.

5:10Even after an intense trial, an enterprise may simply opt to build the tool in-house. Both sides are stuck between a rock and a hard place.

5:24Oslo, the sleep earbuds startup from former Bose engineers, is launching its next device. On Tuesday, the company unveiled SleepBuds 2, an updated version of its original product that tackles key areas of improvement, including battery life, connectivity, and sound quality. The new model costs$279, a$30 increase from the original SleepBuds, which were$249 last month with an MSRP of$349. The launch marks Oslo's first major update since the release of its original device and reflects the company's evolution from a continuation of Bose's brand into its own sleep platform. The original sleep buds, launched in late 2024, were meant to fill the hole left by Bose's departure from the category the year prior.

6:14Oslo's co-founders, N.B. Patel, Brian Mulcahy, and Charlie Taylor were Bose veterans who had been deeply involved with the SleepBuds program, and they saw the potential to continue the business. They acquired and licensed the SleepBuds research and IP for their company, Oslo, making its first product essentially a continuation of Bose's earlier efforts. The initial earbuds, which now have more than 200 ,000 customers, were smaller and more low-profile than AirPods. This made them more comfortable to wear at night, especially for side sleepers. They also offered built-in sleep sounds, Bluetooth streaming, passive noise blocking, an in-ear alarm, sleep tracking, and other features.

6:59The SleepBuds 2 promise a range of improvements, including, most notably, 14 hours of battery life instead of roughly 10. Plus, the charging case can now store enough power for two to three nights of use per charge and adds a button that lets users play a sleep sound or snooze the alarm without reaching for their phone. The update also tackled one of their customers' biggest complaints, Bluetooth connectivity, which could be flaky, although software updates improved it over time. Oslo claims the SleepBuds 2 offer longer Bluetooth range, a more reliable connection, and dedicated pairing controls for faster setup.

7:37The improvements come from a redesigned antenna and extender. The audio system has also been updated, with a built-in amplifier for better sound masking and improved sound quality. Personalized sound tuning is new as well, optimizing audio for specific use cases, such as spoken word or airplane mode and focus mode, in addition to a balanced mode. Another new feature is a sleep shield. which will block incoming calls, alerts, notifications, and Bluetooth audio streaming. This works if the user has not already enabled their phone's built-in sleep focus mode. Oslo's Sleep Insights have expanded to include more details around sleep patterns.

8:19The biometrics in the buds monitor breathing and movement, while the case monitors room conditions, such as the sound levels, light, and temperature. This can help wearers learn which sleep environments lead to deeper, more restorative sleep, helping them improve their sleep over time. The company outlined its plans to become a broader platform for sleep data during an interview with TechCrunch at the Consumer Electronics Show in January, including plans to use AI to better interpret users' sleep patterns. It's also developing an AI sleep buddy with which users could chat about their sleep data.

8:55To kick off the launch, Oslo is offering a sleep mask and travel case with each purchase for a limited time. The$279 SleepBuds 2 also ship with four pairs of silicone ear tips in different sizes, the charging case, and a USB-C cable. That's all for now. For the latest in tech news, go to TechCrunch.com.

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