WP Engine, a managed web hosting company recently banned from WordPress.org, has initiated a federal lawsuit against WordPress co-founder Matt Mullenweg and Automattic, claiming attempted extortion and seeking relief from trademark infringement allegations.
The purpose of the federal lawsuit is to prevent Mullenweg from continuing to “harm” WP Engine and the broader WordPress ecosystem, while also holding Mullenweg and Automattic accountable for their “broken promises and malfeasance.” Malfeasance refers to wrongful or illegal conduct, especially by someone in a position of authority.
What the 98-Page Lawsuit Is About
The essence of the lawsuit is “abuse of power, extortion, and greed.” It claims that the open-source WordPress ecosystem was supposed to be built on the promise of freedom to create without constraints, but these promises were not fulfilled. The alleged failures include making false statements to the IRS, among other claims supported by evidence.
WP Engine issued the following statement to Search Engine Journal:
“Matt Mullenweg and Automattic’s self-proclaimed scorched earth campaign against WP Engine has harmed not just our company but the entire WordPress ecosystem. The symbiotic relationship between WordPress, its community, and the businesses that invest millions to support WordPress users and advance the ecosystem is based on trust in the promises of openness and freedom. Matt Mullenweg’s conduct over the last ten days has exposed significant conflicts of interest and governance issues that, if left unchecked, threaten to destroy that trust. WP Engine has no choice but to pursue these claims to protect its people, agency partners, customers, and the broader WordPress community.”
WP Engine’s lawsuit requests judgment on these eleven points:
1) Intentional Interference with Contractual Relations;
2) Intentional Interference with Prospective Economic Relations;
3) Computer Fraud and Abuse Act, 18 U.S.C. § 1030 et seq.;
4) Attempted Extortion;
5) Unfair Competition, Cal. Bus. Prof. Code § 17200, et seq.;
6) Promissory Estoppel;
7) Declaratory Judgment of Non-Infringement;
8) Declaratory Judgment of Non-Dilution;
9) Libel;
10) Trade Libel; and
11) Slander.
Denial of Trademark Infringement
WP Engine’s lawsuit denies Mullenweg’s assertion that the use of the word “WordPress” to refer to the open-source project is subject to licensing fees. They assert that the use of the name is legal and necessary to communicate information needed by consumers and that this use has been condoned by Mullenweg.
Lawsuits often hinge on evidence, and WP Engine’s lawsuit provides evidence backing each allegation against Mullenweg and Automattic.
Examples include:
– WP Engine’s membership in the ‘Five for the Future’ program acknowledges that WPE was not infringing, as one condition of membership is not infringing on trademarks.
– Matt Mullenweg praised WP Engine on March 21, 2023, at the DE{CODE} developer conference, despite WPE using the disputed terms on their website at the time.
– Matt Mullenweg publicly acknowledged in a livestream on September 26, 2024, that he was aware of WP Engine’s use of the terms “for years,” yet chose not to act.
Accusation of False Statements to State of California
The lawsuit also accuses Mullenweg of publicly transferring the WordPress trademark from Automattic to the non-profit WordPress Foundation but secretly transferring it back to Automattic through an exclusive sublicensable license. This contract forms the basis of the accusation that Mullenweg made false statements to California.
The lawsuit asserts:
“Mullenweg failed to disclose this exclusive licensing arrangement between his nonprofit (the WordPress Foundation) and his for-profit (Automattic) in the WordPress Foundation’s tax filings with the California government…”
Allegation: Mullenweg Made False Statements to IRS
WP Engine also claims that Mullenweg made false statements to the IRS, alleging failure to disclose the license agreement in the WordPress Foundation’s IRS filings and other discrepancies, despite Mullenweg executing IRS forms under penalties of perjury.
False Statements About Trademark Ownership
Another accusation is that Mullenweg made misleading public statements about transferring trademarks to the non-profit WordPress Foundation, although he had transferred the trademark back to Automattic the same day via an exclusive sublicensable license.
The lawsuit states:
“In 2010, in response to growing public concern, the WordPress source code and trademarks were placed into the nonprofit WordPress Foundation… However, Defendants had quietly transferred irrevocable, exclusive, royalty-free rights in the WordPress trademarks right back to Automattic that same day in 2010…”
Further, WP Engine claims it relied on promises made in 2010 when it was founded as a WordPress-based business, investing significantly over 14 years, only for WordPress to be used against them due to “petulant whims” from Automattic’s CEO, Matt Mullenweg.
Alleges Mullenweg Controls WordPress Foundation for Self-Interest
The lawsuit also claims that events at WordCamp and subsequent days reveal Mullenweg’s personal control of the non-profit WordPress Foundation for his own and Automattic’s commercial interests.
“Mullenweg’s recent actions have exposed and highlighted his long history of obfuscating the true facts about his control and manipulation of the WordPress Foundation and wordpress.org…”
Fallout From Lawsuit
The lawsuit was filed on October 2nd, and there are reports that WordPress Executive Director/General Manager, Open Source Division; Automattic, Josepha Haden Chomphosy, has resigned and will be making an announcement soon. WP Tavern journalist Jeff Chandler tweeted about her resignation and noted that she’s in good spirits despite the turmoil.
Read the 98-page federal lawsuit for more details.
