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Automattic creator Matt Mullenweg called WP Engine “a cancer to WordPress.”
Automattic creator and WordPress co-author Matt Mullenweg in San Francisco on July 24, 2013.
Automattic Inc. and its creator have actually been taken legal action against by a WordPress hosting business that declares an extortion plan to extract payments for usage of the hallmark for the open source WordPress software application. Hosting company WP Engine took legal action against Automattic and creator Matt Mullenweg in a grievance submitted the other day in United States District Court for the Northern District of California.
“This is a case about abuse of power, extortion, and greed,” the suit stated. “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 claim declared 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 grievance states that Mullenweg obstructed 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 suit makes allegations, consisting of libel, slander, and tried extortion, and requires a jury trial. The suit was submitted in addition to an exhibition that reveals Automattic’s need for payment. A September 23 letter to WP Engine from Automattic’s legal group recommends “a mere 8% royalty” on WP Engine’s approximately $400 million in yearly profits, 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 declared in the letter.
Mullenweg: WP Engine “a cancer to WordPress”
Mullenweg co-authored the WordPress software application initially launched in 2003 and established Automattic in 2005. Automattic runs the WordPress-based publishing platform WordPress.com. The not-for-profit WordPress Foundation, likewise established by Mullenweg, states it works “to ensure free access, in perpetuity, to the software projects we support.”
Last month, Mullenweg composed a post declaring that WP Engine is “a cancer to WordPress” which it offers “something that they’ve chopped up, hacked, butchered to look like WordPress, but actually they’re giving you a cheap knock-off and charging you more for it.”
Mullenweg slammed WP Engine’s choice to disable the WordPress modification management system. WP Engine’s “branding, marketing, advertising, and entire promise to customers is that they’re giving you WordPress, but they’re not,” Mullenweg composed. “And they’re profiting off of the confusion. WP Engine needs a trademark license to continue their business.”
In another article and a speech at a WordPress conference, Mullenweg declared that WP Engine does not contribute much to the open source task. He likewise indicated WP Engine’s financing from personal equity company Silver Lake, composing that “Silver Lake doesn’t give a dang about your Open Source ideals. It just wants a return on capital.”
WP Engine declares damaged guarantees
WP Engine’s claim indicate guarantees made by Mullenweg and Automattic almost 15 years back. “In 2010, in response to mounting public concern, the WordPress source code and trademarks were placed into the nonprofit WordPress Foundation (which Mullenweg created), with Mullenweg and Automattic making sweeping promises of open access for all,” the suit stated.
Mullenweg composed at the time that “Automattic has transferred the WordPress trademark to the WordPress Foundation, the nonprofit dedicated to promoting and ensuring access to WordPress and related open source projects in perpetuity. This means that the most central piece of WordPress’s identity, its name, is now fully independent from any company.”
WP Engine declares that Automattic and Mullenweg did not divulge “that while they were publicly touting their purported good deed of moving this intellectual property away from a private company, and into the safe hands of a nonprofit, Defendants in fact had quietly transferred irrevocable, exclusive, royalty-free rights in the WordPress trademarks right back to Automattic that very same day in 2010. This meant that far from being ‘independent of any company’ as Defendants had promised, control over the WordPress trademarks effectively never left Automattic’s hands.”
WP Engine implicates the offenders of “misusing these trademarks for their own financial gain and to the detriment of the community members.” WP Engine stated it was established in 2010 and depend on the guarantees made by Automattic and Mullenweg. “WPE is a true champion of WordPress, devoting its entire business to WordPress over other similar open source platforms,” the suit stated.
Company safeguards “reasonable usage” of WordPress hallmark
The offenders’ need that WP Engine pay 10s of countless dollars for a hallmark license “came without warning” and “gave WPE less than 48 hours to either agree to pay them off or face the consequences of being banned and publicly smeared,” according to the claim. WP Engine indicated Mullenweg’s “cancer” remark and other actions, composing:
When WPE did not capitulate, Defendants performed their hazards, releasing a self-described “nuclear” war versus WPE. That war included disparaging WPE in public discussions, straight sending out disparaging and inflammatory messages into WPE clients’ software application and through the Internet, threatening WPE’s CEO and among its board members, openly motivating WPE’s consumers to take their organization to Automattic’s contending company (for an affordable charge, no less), and eventually obstructing WPE and its consumers from accessing the wordpress.org website and wordpress.org servers. By obstructing access to wordpress.org, Defendants have actually avoided WPE from accessing a host of performance normally offered to the WordPress neighborhood on wordpress.org.
Throughout get in touch with September 17 and 19, “Automattic CFO Mark Davies told a WPE board member that Automattic would ‘go to war’ if WPE did not agree to pay its competitor Automattic a significant percentage of WPE’s gross revenues—tens of millions of dollars—on an ongoing basis,” the suit stated. WP Engine states it does not require a license to utilize the WordPress hallmark “and had no reasonable expectation that Automattic had a right to demand money for use of a trademark owned by the separate nonprofit WordPress Foundation.”
“WPE’s nominative uses of those marks to refer to the open-source software platform and plugin used for its clients’ websites are fair uses under settled trademark law, and they are consistent with WordPress’ own guidelines and the practices of nearly all businesses in this space,” the suit stated.
Automattic declared “prevalent unlicensed usage”
Exhibition A in the claim consists of a letter to WP Engine CEO Heather Brunner from a hallmark legal representative representing Automattic and a subsidiary, WooCommerce, that makes a plugin for WordPress.
“As you know, our Client owns all intellectual property rights globally in and to the world-famous WOOCOMMERCE and WOO trademarks; and the exclusive commercial rights from the WordPress Foundation to use, enforce, and sublicense the world-famous WORDPRESS trademark, among others, and all other associated intellectual property rights,” the letter stated.
The letter declared that “your blatant and widespread unlicensed use of our Client’s trademarks has infringed our Client’s rights and confused consumers into believing, falsely, that WP Engine is authorized, endorsed, or sponsored by, or otherwise affiliated or associated with, our Client.” It likewise declared that “WP Engine’s entire business model is predicated on using our Client’s trademarks… to mislead consumers into believing there is an association between WP Engine and Automattic.”
The letter threatened a suit, stating that Automattic “is entitled to file civil litigation to obtain an injunction and an award of actual damages, a disgorgement of your profits, and our Client’s costs and fees.” The letter requires an accounting of WP Engine’s earnings, stating that “even a mere 8% royalty on WP Engine’s $400+ million in annual revenue equates to more than $32 million in annual lost licensing revenue for our Client.”
WP Engine’s suit asks the court for a “judgment declaring that Plaintiff does not infringe or dilute any enforceable, valid trademark rights owned by the Defendants.” It likewise looks for countervailing and compensatory damages.
Automattic provided a declaration rejecting the accusations today. “Their complaint is flawed, start to finish,” the business stated. “We vehemently deny WP Engine’s allegations—which are gross mischaracterizations of reality—and reserve all of our rights. Automattic is confident in our legal position, and will vigorously litigate against this absurd filing, as well as pursue all remedies against WP Engine.”
“Our focus is and has always been protecting the integrity of WordPress and our mission to democratize publishing,” Automattic likewise stated. “From our earliest days, our highest priority has always been our customers. WP Engine can hardly say the same.”
Jon is a Senior IT Reporter for Ars Technica. He covers the telecom market, Federal Communications Commission rulemakings, high speed broadband customer affairs, lawsuit, and federal government guideline of the tech market.
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