WP Engine Vs. Automattic: Rulings Uphold WP Engine’s Lawsuit

A recent court ruling to uphold WP Engine’s lawsuit against Automattic could impact hosting companies, developers, and the future of the platform.

The ongoing legal dispute with WP Engine and Automattic, together with WordPress Co-Founder Matt Mullenweg, saw mixed court rulings, which rejected two claims in full and allowed nine claims to proceed, and also granted WP Engine the opportunity to modify other claims.

According to a WP Engine spokesperson:

“We are pleased the majority of our claims are moving forward and are confident in the strength of our legal position and ability to succeed at trial.”

Claims Surviving Dismissal

Some of the claims that have survived dismissal are:

• Count 1: Intentional Interference with Contractual Relations
• Count 2: Intentional Interference with Prospective Economic Advantage

The two main counts enable WP Engine to pursue allegations that Automattic and Mullenweg deliberately affected their business contracts and possible opportunities. 

This indicates that the judge did not dismiss WP Engine’s entire claim of ‘business sabotage’. If WP Engine prevails on these counts, the outcome could result in damages against WP Engine.

Overall, the judge’s order permitted nine claims to move forward and allowed one claim to partially proceed. The following are the other claims that survive:

• Count 19. CFAA Authorized Access: Allegations of Automattic and Mullenweg have secretly substituted the WP Engine ACF plugin with their own SCF plugin on the sites of customers without authorization.
• Count 5. Unfair competition: Claims that involve unauthorized replacements for plugins and trademark disputes are flagged as illegal business practices in accordance with California law.
• Count 9. Defamation and Count 10. Trade Libel: Statements on WordPress.org declaring WP Engine a “cheap knock-off” and criticizing their GPL code reproduction.
• Count 11. Slander: Public comments from Mullenweg labeling WP Engine “parasitic” and damaging to the open source community.
• Count 17. Lanham Act–Unfair Competition and Count 18. Lanham Act-False Advertising: Attempts to dismiss these charges by Automattic and Mullenweg, in part, did not work, allowing them to continue.

Partially Surviving and Amendable Claims

The court partly affirmed:

• Count 6. The Promissory Estoppel: Specific promises, such as free plugin hosting, were deemed to be sufficient to carry on, but more general promises were deemed unsuitable because of their ambiguity.

The judge dismissed two claims with ‘leave to amend,’ meaning the court found deficiencies in how WP Engine presented them. While the claims were not legally sufficient as filed, the judge allowed WP Engine to revise its complaint. If amended properly, those claims may be reinstated in the case.

Two claims dismissed with leave to amend are:

• Antitrust claims of monopolization, attempted monopolization, and illegal tying (Sherman Act & Cartwright Act): WP Engine was unable to identify the market that is relevant, which led to its dismissal with the possibility of revising.

On the antitrust claims, the Court found WP Engine failed to define a relevant market, stating:

“…consumers entering the WordPress ecosystem by electing a WordPress web content management system would know they were locked-in to WordPress aftermarkets. Mullenweg’s purported deception and extortionate acts did not change that fundamental operating principle of the WordPress marketplace.”

• Count 3. CFAA Extortion Claims: On the extortion claims, WP Engine argued that Automattic and Mullenweg violated the Computer Fraud and Abuse Act (CFAA) by threatening to cut off its access to wordpress.org and demanding licensing fees. The Court dismissed this claim with leave to amend, holding that the allegations did not adequately show ‘extortion’ under CFAA standards. The judge explained that a threat to block access, even alongside licensing demands, was insufficient as pled. Still, WP Engine has been granted an opportunity to revise its complaint (“with leave to amend”).

Fully Dismissed Claims

Two claims were entirely dismissed without permission to amend:

• Count 4. Attempt to Extort under California Penal Code: The only government prosecutors are able to file such lawsuits, except for private lawsuits such as WP Engine’s.
• Count 16. Trademark Misuse: The misuse of trademarks is considered only an affirmative defense, and not an individual reason for the action.

The precise wording is:

“With no authority from WPEngine that authorizes pleading declaratory judgment of trademark misuse as a standalone cause of action rather than an affirmative defense, the Court GRANTS Defendants’ motion to dismiss Count 16, without prejudice to WPEngine asserting it as an affirmative defense if appropriate later in this litigation.”

Matt Mullenweg’s Response

Automattic President, as well as WordPress co-founder Matt Mullenweg, posted an optimistic review, highlighting the court’s decision to dismiss major claims:

He wrote:

“…the court dismissed several of WP Engine and Silver Lake’s most serious claims — antitrust, monopolization, and extortion have been knocked out!”

The attempted extortion claim under California Penal Code (Count 4) was entirely dismissed. However, the Computer Fraud and Abuse Act (CFAA) extortion claim (Count 3) was dismissed with leave to amend, giving WP Engine a chance to refile.

Similarly, the antitrust and monopolization claims (Counts 12–15) were dismissed but not permanently, as the court also allowed amendment. In that sense, his post is technically accurate.

Implications and Next Steps

The court’s nuanced ruling determines the direction of this complex lawsuit. WP Engine retains considerable claims, which claim improper interference and unjust competition, including serious allegations relating to plugins.

These developments highlight the importance of both businesses amid ongoing disagreements about the behavior of markets and the open-source community’s dynamics.

Bottom Line

Industry observers and legal experts will closely monitor the way WP Engine amends its filings and how the case develops in addressing these critical issues that affect the WordPress ecosystem.