WP Engine vs. Automattic: Judge Leans Toward Granting Injunction Despite Vagueness

The courtroom drama between WP Engine and Automattic took another twist, with Judge Araceli Martínez-Olguín suggesting she was inclined to issue an injunction, but criticizing WP Engine's request for being “exceedingly vague.” This ongoing case delves into critical issues of trademark enforcement, fair use, and legal strategies in the tech and open-source world.

A Disputed $32 Million Demand

During the hearing, WP Engine’s attorney presented startling details of a demand from Automattic's Matt Mullenweg—$32 million for a seven-year renewable trademark license. The plaintiff argued that this figure was arbitrary, calculated not based on the actual value of the WordPress trademark but on what Mullenweg believed WP Engine could afford.

WP Engine’s attorney contended:

"For 15 years, WP Engine, like the broader community, used the WordPress mark under nominative fair use. No cease-and-desist letters, no emails, nothing—until the morning of September 20th. That’s when Mullenweg suddenly demanded $32 million in what amounts to ransom, not a royalty."

The plaintiff’s case hinged on portraying the trademark license demand as a pretextual and extortionate maneuver, particularly since the calculation of 8% of WP Engine’s gross revenue seemed arbitrary and unsupported by trademark valuation practices.

Automattic’s Counterpoints

Automattic’s legal defense focused on dismantling WP Engine’s claims of extortion and argued that their legal theories lacked support under California law. Their attorney pointed out:

Legal Mismatch

WP Engine cited case law that doesn’t apply to their extortion claims, conflating duress and rescission with extortion. Automattic also noted that California does not allow private actions for attempted extortion under the Penal Code.

Volunteering Alternative

Automattic highlighted that the license proposal included a second option: WP Engine could fulfill the obligation through volunteer hours instead of monetary payment. This weakened the plaintiff's argument that the demand was purely financial coercion.

Negotiation Opportunity

Automattic pointed to Mullenweg’s willingness to negotiate the terms, as shown in text messages, arguing that WP Engine failed to engage in good faith discussions.

The Judge’s Perspective

Judge Martínez-Olguín acknowledged the complexity of the case, particularly the technical nuances. She was critical of WP Engine’s vaguely worded injunction request but appeared open to granting some form of relief.

“I am inclined to grant some sort of injunction. Here’s the problem: your proposed injunction is exceedingly vague and a non-starter.”

She urged the parties to collaborate on refining the injunction, or alternatively, submit competing drafts for her review. This signals her intent to balance the interests of both sides while avoiding overreach in her ruling.

Background and My Take

This case raises essential questions about the governance and commercialization of open-source projects. Automattic's sudden enforcement of the WordPress trademark after 15 years of community-driven nominative fair use challenges norms of open-source collaboration. On the other hand, WP Engine’s reliance on these norms does not necessarily grant them immunity from trademark enforcement, especially if Automattic establishes that WP Engine's use extends beyond fair use.

It also highlights broader issues:

• Monetization of Open-Source Communities: As open-source projects grow into billion-dollar ecosystems, disputes like this reveal the tension between community ideals and corporate interests.
• Trademark Enforcement Timing: Automattic’s delayed enforcement risks being perceived as opportunistic, which could undermine their credibility in the community.

Live Blog Insights

Legal professionals following the case on Bluesky offered insightful commentary. One noted the judge’s deliberate approach:

“The judge isn’t overly technical but recognizes this, asking thoughtful questions. This level of engagement is rare and promising.”

Another lawyer speculated on the outcome:

“It’s leaning toward a preliminary injunction, though Automattic’s alternate proposal almost succeeded.”

Looking Ahead

The case resumes on December 3rd, when both sides will present revised injunction proposals. Regardless of the outcome, this lawsuit will likely influence the dynamics of open-source licensing and trademark enforcement for years to come.

Final Thought

This dispute underscores the need for transparent and consistent governance in open-source communities. While WordPress owes much of its success to its collaborative ethos, Automattic’s actions raise the question: how do you balance community-driven ideals with the realities of corporate stewardship?