Web hosting provider WP Engine has recently updated its legal complaint with surprising new claims against Automattic, the parent company of WordPress.com, and its co-founder, Matt Mullenweg. In this ongoing legal matter, WP Engine alleges that Mullenweg aimed to impose royalty fees on ten different hosting companies for their utilization of the WordPress trademark and attempted to persuade payment processor Stripe to terminate its contract with WP Engine.
The core of this dispute arises from Mullenweg's belief that WP Engine is benefiting from the open-source WordPress initiative without giving back to the community. He has requested that WP Engine pay 8% of its monthly gross revenues as a royalty for using the WordPress brand.
Initially filed in October 2024, WP Engine's lawsuit accused Automattic and Mullenweg of defamation and misuse of authority. In response, Automattic submitted counterclaims, asserting that WP Engine has been exploiting the WordPress trademark and engaging in misleading marketing practices.
In this latest amendment, WP Engine has revised its complaint for the third time following the discovery of new information that had previously been sealed at Automattic's request. Notably, one of the recent claims suggests that Automattic had plans to target an additional ten competitors with similar royalty demands.
The amended complaint also reveals that Newfold, which owns hosting services like Bluehost and HostGator, is already compensating Automattic for the use of its trademarks, and that discussions are ongoing with other companies, although their names remain confidential.
Furthermore, WP Engine claims that Mullenweg contacted a Stripe executive to exert pressure on the company to cancel WP Engine's agreement, an action taken after WP Engine initiated its lawsuit against Automattic.
WP Engine has also contested the fairness of the 8% royalty rate, describing it as arbitrary. They reference Mullenweg's comments at a recent tech conference, suggesting that the rate was determined based on what he believed WP Engine could afford.
During the conference, Mullenweg explained that the fee was derived from a "business analysis," estimating that it would equate to around $32 million, which he believed would still allow WP Engine to remain financially viable.
Additional claims in the filing highlight aggressive language allegedly used by Mullenweg, including threats to WP Engine regarding customer retention, suggesting that if they did not comply, he would resort to more forceful tactics. Mullenweg reportedly referred to his strategy as "nuclear war" in relation to WP Engine's resistance.
As of the time of publication, Automattic had not provided a comment regarding these allegations.