Automattic Inc. and its founder have been sued by a WordPress hosting company that alleges an extortion scheme to extract payments for use of the trademark for the open source WordPress software. Hosting firm WP Engine sued Automattic and founder Matt Mullenweg in a complaint filed yesterday in US District Court for the Northern District of California.
“This is a case about abuse of power, extortion, and greed,” the lawsuit said. “The misconduct at issue here is all the more shocking because it occurred in an unexpected place—the WordPress open source software community built on promises of the freedom to build, run, change, and redistribute without barriers or constraints, for all.”
The lawsuit alleged that “over the last two weeks, Defendants have been carrying out a scheme to ban WPE from the WordPress community unless it agreed to pay tens of millions of dollars to Automattic for a purported trademark license that WPE does not even need.”
The complaint says that Mullenweg blocked WP Engine “from updating the WordPress plugins that it publishes through wordpress.org,” and “withdrew login credentials for individual employees at WPE, preventing them from logging into their personal accounts to access other wordpress.org resources, including the community Slack channels which are used to coordinate contributions to WordPress Core, the Trac system which allows contributors to propose work to do on WordPress, and the SubVersion system that manages code contributions.”
The lawsuit makes accusations, including libel, slander, and attempted extortion, and demands a jury trial. The lawsuit was filed along with an exhibit that shows Automattic’s demand for payment. A September 23 letter to WP Engine from Automattic’s legal team suggests “a mere 8% royalty” on WP Engine’s roughly $400 million in annual revenue, or about $32 million.
“WP Engine’s unauthorized use of our Client’s trademarks… has enabled WP Engine to unfairly compete with our Client, leading to WP Engine’s unjust enrichment,” Automattic alleged in the letter.
Mullenweg: WP Engine “a cancer to WordPress”
Mullenweg co-authored the WordPress software first released in 2003 and founded Automattic in 2005. Automattic operates the WordPress-based publishing platform WordPress.com. Meanwhile, the nonprofit WordPress Foundation, also founded by Mullenweg, says it works “to ensure free access, in perpetuity, to the software projects we support.”