Automattic planned to target 10 competitors with royalty fees, WP Engine claims in new filing | TechCrunch
Web hosting company WP Engine has filed an amended complaint with brow-raising new allegations in its ongoing legal battle with WordPress co-founder Matt Mullenweg and his company Automattic (WordPress.com’s parent company). The company now claims that Mullenweg intended to target 10 different hosting companies with royalty payments for their use of the WordPress trademark and…
Web hosting company WP Engine has filed an amended complaint with brow-raising new allegations in its ongoing legal battle with WordPress co-founder Matt Mullenweg and his company Automattic (WordPress.com’s parent company). The company now claims that Mullenweg intended to target 10 different hosting companies with royalty payments for their use of the WordPress trademark and tried to get payment processor Stripe to cancel its contract with WP Engine.
At the heart of the dispute, Mullenweg believes WP Engine is profiting from the open source WordPress project without contributing back to the community, and demanded the hosting company pay 8% of its monthly gross revenues as a royalty fee for using the WordPress brand.
The suit, originally filed by WP Engine in October 2024, accused Automattic and Mullenweg of defamation and abuse of power. Automattic filed its counterclaims last year, alleging that the hosting company has been abusing the WordPress trademark and engaging in deceptive marketing practices.
In this latest filing, WP Engine has amended its complaint for the third time after gaining access to information that was uncovered during the discovery process. The information, now unredacted, had been previously sealed at Automattic’s request.
Notably, one of the new claims accuses Automattic of allegedly planning to target 10 other competitors with royalty claims similar to those aimed at WP Engine.
The complaint also states that Newfold, a company whose portfolio includes hosting providers like Bluehost and HostGator, among others, is already paying Automattic for use of its trademarks and that Automattic is in conversations with others. (Names of the other hosts were redacted in the complaint, which referenced email conversations between those companies and Mullenweg.)
WP Engine is also alleging that Mullenweg reached out to a Stripe executive via email to pressure the company to cancel WP Engine’s contract. This occurred after WP Engine had filed its lawsuit against Automattic, the complaint states.
The filing also challenges the 8% rate for the royalty payments as being somewhat arbitrary. Referencing Mullenweg’s comments at TechCrunch Disrupt 2024, WP Engine claims that the Automattic founder essentially came up with the rate because it was what he thought WP Engine “could afford to pay.”
At Disrupt, Mullenweg had responded to a question about how he settled on the 8% fee by saying it was based on a “business analysis.”
“If you estimate that would be about $32 million — they still would have been free cash-flow positive, and based on our estimates, and the negotiations over the past 18 months, we felt like that was a fair amount,” he said at the event.
Other new claims in the filing point to aggressive language Mullenweg allegedly used against WP Engine, like threats that if the web hosting provider didn’t comply, he would start stealing its customers. “If they don’t take the carrot, we’ll give them the stick,” was one of the quotes cited from internal correspondence at Automattic, for instance.
The complaint also includes allegations that Mullenweg used the term “nuclear war” to describe his approach to WP Engine’s defiance.
Asked about the new filing, Automattic shared the following statement with TechCrunch: “There is nothing new here. This is the same narrative WP Engine has been pushing for over a year, and the Court has already dismissed many of its central claims. The lawsuit is going nowhere. This latest filing simply repackages the same tired allegations in an effort to keep the story alive. WP Engine is trying to recast robust competition as something nefarious. We are confident the courts will continue to reject that theory.”
Updated after publication with Automattic’s statement.
