How to handle the WP Engine v. Automattic lawsuit inside your company

A guide for those of us with clients, customers and co-workers affected by the WordPress extortion allegations

On Oct. 2, WP Engine (one of the largest web hosts) sued WordPress co-founder Matt Mullenweg and the corporation he controls, Automattic, for attempted extortion, libel and other unfair business practices.

Here is the 98-page complaint.

Many of my clients (and their clients/customers) use WP Engine to host their WordPress sites, so I’ve put together a quick analysis, along with my recommendations on how to proceed and how to concisely explain the issue to the non-techies in your life.

Feel free to share this with your own clients, customers and co-workers to help navigate this situation. Everything here is my opinion/analysis of public documents, and is not legal advice.

Tl;dr – What should I do?

In my opinion, there is no need to take action to move away from WP Engine as your web host at this time. Likewise, there is no need to stop using the WordPress software.

Although some of the events that led to the lawsuit resulted in temporary outages to WP Engine sites, those appear to have been resolved and are unlikely to recur.

If you are hosting a WordPress site on WP Engine, the cost of migrating is almost certainly higher than any benefits you might receive from doing so. (Even “free migrations” cost time, attention and other resources.)

I see no reason to believe that WP Engine’s service will be degraded in the future as a result of this conflict.

Can I safely use WP Engine?

I see no reason to expect further downtime or performance issues from WP Engine because of the lawsuit or related events.

WordPress is open-source software under the General Public License, which means that anyone can modify it and use it for just about any reason. It would be impossible for anyone to stop you, your clients or WP Engine from using or distributing the WordPress code.

Last week, there was an issue where WordPress plugin updates that were fed through a server controlled by Mullenweg stopped working because Mullenweg shut off that access only for WP Engine customers. This is now resolved. WP Engine can legally copy and host all WordPress plugins (which are required to be open-source) on their own servers, so using Mullenweg’s server is not necessary, and WPE has worked around the fact that they can no longer access Mullenweg’s plugin distribution server directly.

Is WP Engine changing for the worse?

In the past year, we have seen an uptick in what I would describe as “aggressive emails from salespeople” among our clients who use WP Engine. I believe this is an attempt to improve the company’s profitability, and it’s quite annoying, as customers are often confused about whether they really need to upgrade when a salesperson contacts them. Most of the time, my advice is that the customer does not need to upgrade to a higher plan as the salesperson suggests, although there might be some benefits to doing so.

While this is an annoyance and a departure from WP Engine’s history of great customer service over the past decade, I also don’t think there’s any guarantee that if you move to another host, the same thing won’t happen. (Or that a new host won’t have other issues that are equally annoying.)

Web hosting is a very low-margin and hotly competitive business — what we call a red ocean — so it’s hard to avoid this type of thing no matter which host you choose. While this could change in the future, my general advice remains that the cost of changing is still higher than any potential benefit.

Another way to put this — all web hosts are a pain in the neck in different ways, so it is difficult to “vote with your wallet” when every option is sub-par at times. I view “host-chasing” as sort of akin to “rate-chasing” on a savings account: is it really worth all the work of switching to a new bank account for an extra 0.25% APY? Or should you devote that time to things that have more impact on your life/business?

Can I still use WordPress?

Yes. WordPress is open-source and, in my view, remains the best software on the market for the vast majority of my clients. If that changes, it will be years down the road as a result of a slowdown in contributions of new open-source code from a wide range of people who work on the project.

My best guess is that the value of WordPress as a content management system is so high to so many companies that the project would continue even if both Automattic and WP Engine ceased to exist. There’s currently no better alternative and it’s very valuable to have high-quality, open-source software as the basis for building a website.

And as I mentioned above, even if every WordPress company and contributor vanished tomorrow, you’d always have free-and-clear access to use and modify all WordPress code, since it is permanently free and open-source.

What’s up with the extortion allegation?

WP Engine sued Mullenweg and Automattic for, among other things, “attempted extortion.”

This is related to Mullenweg’s demand that WP Engine pay an 8% “trademark licensing fee” to Automattic, and the threat that Mullenweg would go “nuclear” on WP Engine (in the sense of saying bad things about them in public) if they did not agree to that payment. In one now-public letter, he asked for approximately 8% of WP Engine’s revenue, or an equivalent amount of employee programming time, for at least the next seven years.

We’ll see what the courts think. WP Engine contends that (A) they never violated the WordPress trademark and (B) Mullenweg illegally attempted to extort them. Based on my knowledge of public events and statements, I think WP Engine has a strong case that their use of “WordPress” was protected by fair use. And there’s no dispute that Mullenweg demanded money and then went “nuclear” (in his words) in public.

How a judge or jury decides on the details will be very interesting. However, the resolution of this really won’t affect your website decisions in the near term.

How long will this take to resolve?

If it goes through the courts, it will take years. Two things could happen sooner:

• A private, out-of-court settlement is reached. (If this happens we may never know the exact terms.)
• A judge rules that WP Engine is not violating the WordPress trademark. (WP Engine has requested an expedited decision on this question before the full case is decided.)

If it goes to trial, it may go before a jury, who could award damages. Take note that sometimes juries award extremely large sums in damages, but that these are often reduced by appellate judges later.

All in all, a jury trial and appeal will take years. I think it is very unlikely that this case will bankrupt Mullenweg or Automattic, and WP Engine is currently not at significant risk other than paying its legal fees. (For WP Engine to be at risk, someone would have to sue them for trademark infringement. This has not happened so far.)

What’s next?

I suggest moving on and enjoying your day 🙂 — no need to get sucked any deeper into the web hosting madness than absolutely necessary.