WP Engine and Automattic: The Feud

The lawsuit filed by WPEngine against Automattic and Matthew Mullenweg (Case No. 3:24-cv-06917) is a complex legal battle primarily revolving around allegations of trademark infringement, interference with contractual relations, extortion, and various forms of unfair competition. Here’s a detailed breakdown of the case:

Background and Overview

The complaint opens by framing the case as one centered around the misuse of power and the betrayal of the open-source principles that are foundational to the WordPress community. WPEngine (WPE) argues that Matthew Mullenweg and his company, Automattic, have violated the promises they made to the WordPress community by secretly retaining control over the WordPress trademarks, which were supposed to have been transferred to the WordPress Foundation—a non-profit organization—back in 2010.

The crux of the issue is that, according to WPE, Mullenweg and Automattic have used this trademark control to manipulate the WordPress ecosystem for their financial gain, while simultaneously harming competitors like WPEngine and violating the expectations of open access and fairness in the WordPress community. WPEngine accuses the defendants of engaging in illegal behavior such as extortion, libel, and slander, and seeks legal remedies, including damages and declaratory judgments.

Key Allegations

1. Trademark Misuse and Deception:
   • Automattic’s Transfer of Trademarks to WordPress Foundation: In 2010, Automattic publicly transferred the WordPress trademarks to the WordPress Foundation to address growing concerns about corporate control over the WordPress project. The transfer was framed as a move to protect the integrity of the WordPress brand and community. Mullenweg reassured the public that this transfer would ensure that WordPress would remain independent of any company and would be accessible for free, forever.
   • Secret Licensing Agreement: However, WPE alleges that, on the same day the trademarks were transferred to the non-profit foundation, the Foundation secretly granted Automattic an irrevocable, royalty-free, exclusive license to use those trademarks. In effect, this meant that Automattic never really lost control of the trademarks and could continue to wield them for commercial advantage.
   • Mullenweg’s Control Over WordPress.org: The complaint highlights how Mullenweg exercises control over WordPress.org, portraying it as a non-profit entity while using it to advance his business interests through Automattic. WPE claims this dual role is a betrayal of the community and goes against the open-source ethos of WordPress.
2. WPEngine’s Contributions to WordPress and Reliance on Trademarks:
   • WPEengine, founded in 2010, has built its business exclusively around WordPress, investing millions of dollars and over a decade of development and support in the WordPress ecosystem. WPE positions itself as one of the most trusted service providers in the WordPress community, developing plugins, hosting, themes, and other tools.
   • The company has long used the WordPress and WooCommerce trademarks, as is standard for members of the WordPress ecosystem, which naturally refers to and works with WordPress software. WPE argues that this use is “nominative,” meaning it is simply describing the software with which its services integrate, and is thus legally protected.
   • Automattic’s Initial Support: Automattic initially invested in WPE and maintained that investment until 2018, all the while aware of WPE’s use of WordPress trademarks on its website and marketing materials. This longstanding tolerance of WPE’s use of the trademarks, WPE argues, undermines Automattic’s sudden claims of trademark violations.
3. Extortion Allegation:
   • The most severe allegation is that Mullenweg and Automattic attempted to extort WPEengine. The complaint claims that in September 2024, Automattic demanded that WPEengine pay tens of millions of dollars for a trademark license it allegedly did not need, under threat of being banned from the WordPress ecosystem and smeared publicly.
   • Ultimatum: WPEengine was allegedly given less than 48 hours to comply with this demand. When they did not capitulate, Automattic and Mullenweg followed through on their threats, launching what the complaint describes as a “nuclear” campaign against WPEengine, which included defamatory public statements and direct actions to harm WPEengine’s business.
   • Actions Against WPE: These actions included blocking WPE’s access to WordPress.org, defaming WPE in public forums, and encouraging WPE’s customers to switch to Automattic’s competing services (such as WordPress VIP and Pressable) with discounts offered as incentives. This blocking prevented WPE from accessing crucial tools and resources on WordPress.org, thereby disrupting its operations.
4. Defamation, Slander, and Libel:
   • Public Statements: The complaint claims that Mullenweg made defamatory statements about WPEengine, including accusing the company of trademark violations in public forums such as Reddit. He allegedly escalated this campaign by encouraging customers to switch away from WPEengine, accusing the company of unfair competition, tarnishing Automattic’s reputation, and making false claims about WPE’s unauthorized use of trademarks.
   • Customer Interference: Defendants are accused of directly interfering with WPE’s customer relationships, deliberately harming WPE’s standing and reputation within the WordPress community by making baseless accusations of trademark infringement and spreading misinformation about the company’s business practices.
5. Interference with Contractual Relations and Economic Harm:
   • Economic Impact: WPE claims that the defendants’ actions have caused significant economic harm to its business. By cutting off access to WordPress.org and falsely accusing WPE of violations, Automattic interfered with WPE’s contracts and relationships with its customers, causing disruption to its business operations.
   • Tarnished Reputation: The defamation campaign not only threatened WPE’s customer base but also its standing within the broader WordPress ecosystem, where its reputation as a trusted platform has been built over years of contributions.

Legal Claims

The complaint lists a total of eleven causes of action:

1. Intentional Interference with Contractual Relations: Automattic’s actions allegedly interfered with WPE’s contractual relationships by spreading false information and blocking access to resources.
2. Intentional Interference with Prospective Economic Relations: By cutting off access to WordPress.org and attacking WPE’s reputation, the defendants allegedly harmed WPE’s potential future business dealings.
3. Computer Fraud and Abuse Act (CFAA): This claim is based on the accusation that Automattic improperly accessed and interfered with WPE’s access to WordPress.org, violating the CFAA.
4. Attempted Extortion: WPE claims that the demands for millions of dollars under threat of being banned from the WordPress ecosystem constitutes attempted extortion.
5. Unfair Competition (California Business & Professions Code § 17200): WPE argues that Automattic engaged in unfair competition by using deceptive practices to manipulate the marketplace and harm competitors like WPEengine.
6. Promissory Estoppel: This claim asserts that Automattic made promises to the community and WPEengine about the independence and open nature of WordPress, but broke those promises for financial gain.
7. Declaratory Judgment of Non-Infringement: WPE seeks a judicial declaration that its use of the WordPress trademarks does not constitute infringement.
8. Declaratory Judgment of Non-Dilution: WPE also seeks a ruling that its use of the trademarks does not dilute their value or cause harm to the WordPress brand.
9. Libel: Mullenweg’s public statements accusing WPE of trademark violations are alleged to be libelous.
10. Trade Libel: WPE claims that Automattic defamed the company’s business practices, damaging its relationships with customers.
11. Slander: This claim focuses on the alleged verbal defamation that harmed WPE’s reputation.

WPEngine’s Demands

In addition to damages for the economic harm caused by the alleged extortion and defamation, WPEngine is seeking:

• A declaratory judgment to clarify its rights regarding the use of WordPress trademarks.
• Injunctive relief to prevent Automattic from continuing its alleged harmful actions.
• Compensation for the harm caused to its business, including lost revenue, damaged relationships, and costs related to legal defense.

Conclusion

The lawsuit frames Automattic and Matthew Mullenweg as exploiting their dominant position within the WordPress ecosystem to stifle competition and extract financial benefits at the expense of competitors like WPEngine. By bringing this case to court, WPEngine is seeking both financial restitution and a judicial ruling that will protect its future operations from further interference. The case shines a spotlight on the tension between open-source ideals and the commercial interests of major players in the tech industry.

Certainly! Let’s dive even deeper into the specific elements of the WPEngine vs. Automattic and Matthew Mullenweg lawsuit, examining the intricacies of the claims, the broader context of open-source software, and the potential implications of the case.

Detailed Breakdown of Key Legal Allegations

1. Intentional Interference with Contractual Relations
   • Claim Details: WPEngine alleges that Automattic and Mullenweg intentionally interfered with their existing contracts by making false claims and publicly defaming the company. By disparaging WPEngine’s reputation in the WordPress ecosystem and advising WPE’s customers to leave the company for Automattic’s services, the defendants disrupted WPEngine’s business relationships.
   • Legal Context: In California, interference with contractual relations occurs when a defendant knowingly disrupts an existing contract between two parties, causing harm to one party. The plaintiff (WPEngine) must prove that the defendant’s actions were intentional, improper, and directly caused economic damage. Here, WPE claims that Automattic’s defamatory statements and its move to block access to critical WordPress.org resources directly interfered with its customer agreements.
2. Intentional Interference with Prospective Economic Relations
   • Claim Details: This claim focuses on the broader economic harm caused by Automattic’s alleged actions. Beyond existing contracts, WPEEngine argues that the defendants interfered with future potential business opportunities by tarnishing their reputation within the WordPress community.
   • Legal Context: This tort requires WPE to prove that it had an economic relationship with a probable future benefit, that the defendants knew about this relationship, and that their intentional and wrongful actions disrupted it. WPE argues that Automattic’s actions, including public statements suggesting WPE’s trademark violations and legal threats, discouraged future customers from engaging with them, causing loss of business opportunities.
3. Computer Fraud and Abuse Act (CFAA)
   • Claim Details: The CFAA is a federal law primarily aimed at combatting hacking and unauthorized access to computers. WPEengine claims that Automattic’s blocking of its access to WordPress.org was not just a business decision but amounted to a violation of this law, as it involved the unauthorized restriction of access to key web resources that WPE depends on.
   • Legal Context: The CFAA (18 U.S.C. § 1030) prohibits various forms of unauthorized access to computers and networks. WPE alleges that by blocking their access to WordPress.org, a key part of the infrastructure needed to manage and maintain WordPress websites, Automattic’s actions went beyond a business dispute and constituted illegal interference with WPE’s use of a public resource. WPE will need to prove that Automattic intentionally restricted access to this essential platform without proper authorization, causing damage to WPE’s business.
4. Attempted Extortion
   • Claim Details: One of the most serious allegations made by WPE is that Mullenweg and Automattic engaged in attempted extortion. According to WPE, Automattic demanded an exorbitant payment (tens of millions of dollars) in exchange for a trademark license that WPE did not believe it needed. When WPE refused, the defendants allegedly threatened them with public embarrassment and business destruction.
   • Legal Context: Extortion involves threatening to harm another party unless they comply with certain demands, often financial. In this case, WPE argues that the defendants used their control over WordPress trademarks as leverage to extort WPE into paying for a license under the threat of banning WPE from the WordPress ecosystem and harming its reputation. This claim, if proven, carries both civil and potential criminal ramifications, as extortion is a serious offense under federal and state law.
5. Unfair Competition (California Business & Professions Code § 17200)
   • Claim Details: WPE asserts that Automattic’s actions violate California’s Unfair Competition Law (UCL). This law broadly prohibits any unlawful, unfair, or fraudulent business practices. WPE claims that Automattic’s behavior, from the alleged trademark extortion to the defamation campaign, constitutes an unfair business practice designed to harm competition and monopolize the WordPress ecosystem.
   • Legal Context: The UCL provides broad protections against a range of unethical or anti-competitive behaviors. WPE needs to show that Automattic’s actions violated not only business norms but also legal standards, causing unfair harm to WPE and benefiting Automattic. This claim likely ties in with the broader themes of manipulation and control within the open-source community, where Automattic allegedly used its power unfairly against competitors.
6. Promissory Estoppel
   • Claim Details: WPE’s promissory estoppel claim is based on the idea that Mullenweg and Automattic made public promises about the WordPress trademarks and open-source access that they later reneged on. Specifically, when Automattic transferred the trademarks to the WordPress Foundation in 2010, they assured the community that the trademarks would be protected for the public good and that WordPress would remain free from corporate control. WPEengine argues that it relied on these promises when building its business.
   • Legal Context: Promissory estoppel applies when one party makes a promise, another party reasonably relies on that promise, and the first party breaks the promise, causing harm to the relying party. WPE must prove that Automattic and Mullenweg made clear promises about the independence and accessibility of the WordPress trademarks and that WPE materially relied on those promises, investing heavily in its business based on the understanding that Automattic would not exploit its control of the trademarks.
7. Declaratory Judgment of Non-Infringement
   • Claim Details: In response to Automattic’s trademark infringement accusations, WPE seeks a declaratory judgment from the court affirming that their use of the WordPress and WooCommerce trademarks is legal and does not infringe on Automattic’s rights. WPE argues that its use of the trademarks falls under “nominative fair use,” meaning it is simply using the trademarks to describe the services it provides (which are built on WordPress), and not to mislead customers.
   • Legal Context: In a declaratory judgment, a court makes a legal determination to resolve uncertainty. WPE wants the court to rule that its use of the trademarks is legitimate, allowing it to continue its business without fear of further legal action from Automattic. This is a critical claim because it would protect WPE from future trademark litigation and allow it to use the WordPress marks freely in its marketing and services.
8. Declaratory Judgment of Non-Dilution
   • Claim Details: WPE also seeks a declaratory judgment that its use of the WordPress trademarks does not dilute their value or harm Automattic’s brand. Automattic has accused WPE of tarnishing the trademarks by allegedly using them without authorization, but WPE contends that its use is consistent with the broader open-source community’s practices.
   • Legal Context: Trademark dilution typically refers to the weakening of a famous trademark’s distinctiveness. WPE must show that its use of the trademarks is appropriate and does not dilute the WordPress brand. This would safeguard WPE’s business from further accusations of trademark violations.
9. Libel, Trade Libel, and Slander
   • Claim Details: WPE claims that Mullenweg made numerous defamatory statements about the company, including accusations of trademark violations and unethical behavior. These public statements were allegedly intended to damage WPE’s reputation, particularly within the WordPress community and with potential customers.
   • Libel vs. Trade Libel: Libel generally refers to defamation that damages an individual or company’s reputation, while trade libel specifically relates to false statements that disparage a company’s goods or services. WPE claims that Mullenweg’s public accusations and social media posts caused direct harm to its business, leading to lost customers and a tarnished reputation.
   • Slander: Slander is the spoken form of defamation. If Mullenweg made defamatory verbal statements in public forums or at conferences, this could also constitute slander.
   • Legal Context: WPE needs to prove that Mullenweg’s statements were false, that they were made with malicious intent, and that they caused actual harm to WPE’s business. The case hinges on whether the statements made by Automattic and Mullenweg were grounded in truth or whether they were designed to discredit WPE maliciously.

Context of Open-Source Principles and WordPress Ecosystem

A significant aspect of this case involves the conflict between open-source principles and corporate interests. WordPress began as an open-source project, meaning its software is freely available for anyone to use, modify, and distribute. This ethos has built a large and active community of developers, users, and companies—like WPEengine—that have invested in the WordPress ecosystem, expecting that it would remain free from corporate control.

However, WPEengine’s lawsuit paints a picture of betrayal of those ideals. The alleged secret licensing arrangement between the WordPress Foundation (the supposed non-profit steward of WordPress) and Automattic (a for-profit company) represents, in WPE’s view, a breach of the trust that the WordPress community placed in Mullenweg and his companies.

WPE’s claims raise broader concerns about the future of open-source governance:

• Community vs. Corporate Interests: The lawsuit suggests that Automattic and Mullenweg have leveraged their dominant position to exploit open-source trademarks and suppress competition. If true, it challenges the integrity of the open-source movement, where community-driven development and accessibility are supposed to be paramount

Open Source vs. Corporate Control in the WordPress Ecosystem

The lawsuit between WPEngine and Automattic/Matthew Mullenweg brings to light the tension between the open-source principles that WordPress was built on and the commercial interests of the entities that manage the platform. WordPress, which powers over 40% of the web, is a major player in the open-source ecosystem, and its success has been driven largely by the contributions of a global community of developers, including companies like WPEngine. These entities have invested heavily in the platform, relying on the understanding that WordPress would remain free, open, and not subject to the commercial whims of any single corporation.

However, WPEEngine’s complaint argues that Automattic and Mullenweg have used their control over the WordPress trademarks to wield disproportionate power over the ecosystem, leveraging that control to suppress competition and extort financial benefits from companies that rely on WordPress for their business.

Allegations of Trademark Abuse

One of the key issues in the case is the control over the WordPress trademarks. Trademarks are not part of the open-source software code itself but are crucial for brand identity and consumer recognition. When Automattic transferred the WordPress trademarks to the WordPress Foundation in 2010, it was seen as a move to separate the WordPress brand from corporate control, ensuring that the project would remain independent and governed by a non-profit. This transfer was meant to guarantee that the community would have long-term access to the brand without being beholden to a single company.

However, WPEEngine’s complaint reveals that Automattic received an exclusive, royalty-free, perpetual license to use the WordPress trademarks, effectively nullifying the public promise that the trademarks would no longer be under corporate control. This alleged secret arrangement gave Automattic ongoing control over the brand, which they could use to their competitive advantage against other companies in the WordPress ecosystem.

The Impact on Competition

WPEEngine’s lawsuit emphasizes the harm this arrangement has caused to the competitive landscape. By holding exclusive rights to the WordPress trademarks, Automattic allegedly has the power to dictate who can use the WordPress brand, giving them an unfair competitive edge. This is particularly troubling in an open-source ecosystem, where many companies, developers, and users depend on WordPress as a public good.

• Nominative Fair Use Defense: WPEEngine argues that its use of the WordPress trademarks is protected by the principle of nominative fair use. This means that they are using the trademarks not to confuse customers or to mislead them into thinking WPE is affiliated with Automattic, but rather to describe their products and services in relation to WordPress, the platform they support. Essentially, they are claiming that it’s impossible to explain what they do (providing managed WordPress services) without referring to WordPress itself. This is a common practice in the WordPress ecosystem, where companies and developers frequently use the WordPress name to describe their products and services.
• Automattic’s New Licensing Demands: The lawsuit alleges that Automattic, leveraging its exclusive control of the trademarks, demanded that WPE pay tens of millions of dollars for a trademark license. WPE argues that they do not need such a license under the nominative fair use doctrine, and Automattic’s demand was an unjustified attempt to extract money under threat of banning WPE from the WordPress community. This demand for licensing fees is characterized by WPE as extortion, a severe allegation that goes beyond standard business disputes and delves into the realm of illegal activity.

WordPress.org and the Power Dynamics

WPEEngine further claims that Automattic and Mullenweg have used their control over WordPress.org—the hub for the WordPress open-source project and community—as a tool to manipulate competitors. WordPress.org is presented as a public, non-profit resource where the community can access the WordPress software, contribute to its development, and share themes and plugins. However, WPE argues that Mullenweg exercises de facto control over the site, allowing him to direct community resources and block access to competitors.

• Blocking of Access: The complaint states that Automattic blocked WPEEngine’s access to the wordpress.org portal and servers, which effectively cut WPE off from critical resources needed to serve its customers and maintain its products. WordPress.org is the platform where many key functionalities, updates, and integrations are hosted. Blocking WPE from this platform not only disrupts their business but also harms their customers, who rely on WPE’s services for website development and hosting.
• Disparagement and Defamation: The lawsuit also accuses Mullenweg of defaming WPEEngine in public forums, including Reddit, where he allegedly made false claims about WPE violating WordPress’s trademarks. According to the complaint, these public attacks were part of a broader strategy to discredit WPEEngine and drive customers away from them and toward Automattic’s competing services, such as WordPress VIP and Pressable.

Wider Implications for the Open-Source Community

The issues raised by this case have far-reaching implications not only for WPEEngine but for the entire open-source community that relies on WordPress. The open-source model thrives on transparency, trust, and community contributions, and when a dominant company within that ecosystem is perceived to be acting against those principles, it can undermine confidence in the platform.

• Erosion of Trust: If Automattic is found to have acted in bad faith by retaining hidden control over the WordPress trademarks and using that control to extort competitors, it could erode trust in the open-source governance of WordPress. Other companies and developers who have contributed to the project may feel that their efforts have been exploited for corporate gain.
• Future of Open-Source Governance: The case also raises questions about the governance of open-source projects that become commercially successful. As open-source software grows in popularity, it often attracts commercial interest from companies looking to profit from the community’s work. While it is not inherently wrong for companies to build profitable businesses around open-source projects, the balance between commercial interests and community governance must be carefully managed to prevent corporate dominance from undermining the project’s open nature.
• Legal Precedents: This lawsuit could set a legal precedent for how trademarks are handled in open-source ecosystems. If WPEengine’s claims of nominative fair use are upheld, it could protect other companies from similar trademark-related demands in the future, ensuring that they can continue to refer to open-source software projects in their marketing without fear of legal repercussions. On the other hand, if Automattic’s trademark enforcement is deemed valid, it could give companies more leverage to exert control over the use of trademarks in open-source projects.

WPEngine’s Claims for Declaratory Judgments

WPEEngine is seeking two declaratory judgments from the court: one to affirm that they are not infringing on Automattic’s trademarks, and another to confirm that their use of the WordPress and WooCommerce marks is not diluting the brand.

• Declaratory Judgment of Non-Infringement: A declaratory judgment on non-infringement would protect WPEEngine from future trademark lawsuits, allowing them to continue using the WordPress trademarks to describe their services. This is critical for WPE, as their business is built entirely around supporting WordPress, and it would be impossible to market their services without referring to the platform.
• Declaratory Judgment of Non-Dilution: Similarly, the non-dilution judgment would prevent Automattic from claiming that WPE’s use of the trademarks is damaging the brand’s distinctiveness or reputation. This would be especially important if WPE’s nominative fair use defense is upheld, as it would affirm their right to use the WordPress and WooCommerce marks in ways that accurately describe their services without misleading customers.

Potential Outcomes and What’s at Stake

1. If WPEngine Prevails: If the court rules in favor of WPEEngine, it could reshape the competitive landscape of the WordPress ecosystem. Automattic would lose significant leverage over its competitors, and the ruling could provide legal protection to other companies that use the WordPress trademarks in a similar manner. It would also signal that attempts to control or extort competitors within an open-source community can backfire, reinforcing the principles of openness and fairness that underpin the WordPress project.
2. If Automattic Prevails: If the court sides with Automattic, it could give the company broad power to enforce its control over the WordPress trademarks, potentially forcing other companies in the ecosystem to pay licensing fees or face similar consequences. This could lead to a more corporate-controlled WordPress ecosystem, where smaller companies and developers must navigate legal hurdles to participate in the community.

Conclusion

The WPEngine lawsuit against Automattic and Matthew Mullenweg highlights the complex tensions that arise when open-source software projects become commercially successful. At its core, the case raises important questions about control, fair competition, and the governance of open-source ecosystems. The outcome of the case could have significant ramifications not just for WordPress but for the broader open-source community, shaping how future disputes over trademarks, governance, and competition in open-source projects are resolved.

WPEEngine’s detailed allegations—ranging from trademark infringement and extortion to defamation and unfair competition—paint a picture of a company fighting for its survival against a larger competitor that it claims has broken the very principles of openness and community trust on which WordPress was built. As the case moves forward, it will provide insight into the legal boundaries that govern open-source projects and the responsibilities of companies like Automattic that operate within them.