WP Engine Amends Complaint Amid Legal Clash with WordPress Co-Founder
WP Engine, a prominent hosting company, has filed an amended complaint within the framework of its ongoing legal skirmish with Matt Mullenweg, a co-founder of WordPress, as well as his parent company, Automattic, the operator of WordPress.com.
The updated allegations assert that Mullenweg sought to exert pressure on ten distinct hosting providers, demanding royalties for the usage of the WordPress brand, while he also allegedly attempted to coerce the payment processor Stripe into terminating its contract with WP Engine.
The crux of the discord lies in Mullenweg’s assertion that WP Engine benefits from the open-source WordPress project without adequately investing in the community. He demanded an 8% royalty on monthly gross revenues for the use of the WordPress brand.
Originally lodged in October 2024, the lawsuit accuses both Automattic and Mullenweg of defamation and misuse of authority. In response, Automattic filed countermotions last year, contending that WP Engine has misappropriated the WordPress trademark and engaged in deceptive marketing strategies.
This latest registration reveals WP Engine’s third amendment to its complaint, which follows disclosures during the discovery phase. Previously sealed information, as requested by Automattic, has now unveiled critical aspects of the case.
The new allegations posit that Automattic purportedly intended to target an additional ten competitors with similar royalty claims.
Moreover, the complaint notes that Newfold, which encompasses brands like Bluehost and HostGator, is already compensating Automattic for its trademark usage, while negotiations are ongoing with other providers.
Though the identities of additional hosting companies were redacted, the documentation alludes to internal correspondence between these organizations and Mullenweg.
WP Engine further claims that Mullenweg approached Stripe’s CEO, exerting pressure to abrogate the contract with WP Engine shortly after the initial lawsuit was filed against Automattic.
The filing challenges the 8% royalty rate as arbitrary, citing Mullenweg’s remarks at TechCrunch Disrupt 2024. WP Engine asserts that Mullenweg established this figure purely based on his belief that WP Engine could afford it.
“If you had to estimate, this would be about $32 million – they would still have positive free cash flow, and, in our assessment, given the negotiations over the last 18 months, we considered that to be a fair amount.”– Matt Mullenweg, TechCrunch Disrupt 2024
Additional statements in the filing highlight Mullenweg’s aggressive stance toward WP Engine. This includes threats of customer poaching, encapsulated in the phrase: “If they don’t take the carrot, we’ll give them a stick,” as documented in Automattic’s internal communications.
“If they won’t take the carrot, we’ll give them a stick”– source of Automattic’s internal correspondence
Furthermore, the materials refer to Mullenweg’s combative strategy, which he characterized as a “nuclear war” in dealing with WP Engine.
As of now, Automattic has not issued any remarks in response to the ongoing developments.
The Implications of the Lawsuit for the WordPress Ecosystem
These legal proceedings could wield significant consequences for the future application of the WordPress trademark within the hosting market and the community’s authority in determining branding regulations.
Stakeholders across the industry are intently monitoring the situation, as the ruling may fundamentally reshape interactions among brand proprietors, partners, and competitors.
With Automattic remaining silent on its official stance, the rationale and implications surrounding the case remain ambiguous. The ensuing court activities will delve deeper into the particulars of objections, evidence, and potential resolutions between the involved parties.
Source link: Mezha.net.
