Federal judge intervenes to shield web host from 'scorched earth nuclear approach’ by WordPress

(CN) — A federal judge, on Tuesday, imposed a ceasefire on software maker WordPress’ self-described “scorched earth nuclear” war over trademarks against WPEngine, a smaller tech company that builds tools for web designers and hosts websites built on WordPress.

U.S. District Judge Araceli Martínez-Olguín agreed to WPEngine’s request for a preliminary injunction, stopping WordPress from “blocking, disabling, or interfering with WPEngine’s and/or its employees’, users’, customers’, or partners’ access to wordpress.org,” and halting WordPress’ campaign against WPEngine, though the legal dispute between the two tech firms will continue.

In her ruling, the judge noted that more than two million websites use a special plugin designed by WPEngine, that Automattic CEO and WordPress-co-founder CEO Matt Mullenweg is accused of tampering with.

“Those users rely on the stability of the plugin, and WordPress more broadly, to operate their websites, run their businesses, and go about their day online,” Martínez-Olguín wrote. “Maintaining that continuity and preventing arbitrary disruption stemming from a corporate dispute is in the public interest.”

She later added: “Those who have relied on the WordPress’s stability, and the continuity of support from for-fee service providers who have built businesses around WordPress, should not have to suffer the uncertainty, losses, and increased costs of doing business attendant to the parties’ current dispute.”

The software was originally made free for anyone to use under an open-source licensing agreement — in order “to democratize publishing across the Internet,” according to a written declaration by Mullenweg, who went on to note that more than 40% of every website operating today uses WordPress.

WPEngine, meanwhile, is a for-profit company, owned by a private equity group, that creates themes, plugins and other tools that can be used with WordPress. It also hosts WordPress websites.

While one might conclude that WPEngine is using free, open-source software in order to make a profit, WPEngine CEO Heather Brunner has argued that the relationship is symbiotic, writing in a declaration that her company has “invested hundreds of millions of dollars, not only supporting WordPress in the market, but creating a platform without which many customers would not have been able to use WordPress for their sites in a cost-efficient manner, and thus might have never adopted, or left, the WordPress platform were it not for [WPEngine].”

Crucially, WPEngine’s hosting service competes with services owned by Automattic, a for-profit company headed by Mullenweg, and which he claims is now owner of the WordPress trademark.

The dispute between the two companies began in September when seemingly out of nowhere, Mullenweg and Automattic CFO Mark Davies sent WPEngine a letter demanding tens of millions of dollars — either “a royalty fee equal to 8% of its gross revenue on a monthly basis” or “8% of its revenue in the form of salaries of WPEngine employees working on WordPress core features” — in exchange for using the WordPress trademark. If WPEngine didn’t acquiesce, Mullenweg promised a “scorched earth nuclear approach.”

Shortly after WPEngine rejected the demands, Mullenweg accused WPEngine of “feed[ing] off the host without giving anything back,” and encouraged its customers to “not renew their contracts" and its employees to quit during a speech and wrote a blog post calling WPEngine a “cancer to WordPress” that was “strip-mining the WordPress ecosystem, giving our users a crappier experience so they can make more money.”

Days later, WPEngine was abruptly blocked from updating plugins it makes through WordPress. A day after that, WPEngine customers were banned “from accessing wordpress.org resources through the administration panel, which includes downloading WordPress themes and plugins, including themes and plugins developed by WPEngine,” according to WPEngine in a court filing.

In October, the login page to WordPress was changed to include a check box reading, “I am not affiliated with WPEngine in any way, financially or otherwise.” Checking the box was a prerequisite for logging in.

WPEngine sued for fraud, attempted extortion and slander. It says it had been using the WordPress trademark for 15 years, which it had thought it was free to do so under the terms of the open-source licensing agreement.

“When [WPEngine] refused to capitulate to Automattic’s astronomical and extortionate monetary demands, Mullenweg made good on his threats,” WPEngine wrote in its complaint. “The threat of ‘war’ turned into a multi-front attack, part of an overarching scheme to extract payouts from WPE. That threat is ongoing. Defendants have continued to disrupt WPE’s business and falsely disparage its products and services.”

During a hearing last month in San Francisco, Anna Shaw, counsel for Automattic, said that WPEngine had no right to use the WordPress trademark. She argued that granting the preliminary injunction would be a slippery slope, telling the judge, “Essentially any demand letter sent out by any trademark owner, the recipient of that letter could potentially argue that it is a claim of extortion if they disagree with the merits of that particular demand.”

But Martínez-Olguín disagreed, writing in her ruling that WordPress’ conduct was “designed to induce breach or disruption” of contracts between WPEngine and its customers.

A WPEngine spokesperson said, in a written statement, that the ruling would “bring back much-needed stability to the WordPress ecosystem.” An email to WordPress’ lawyers requesting a comment had not been returned by press time.

Editor’s note: Courthouse News Service uses WordPress to publish its news website.

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