Automattic, WP Engine
Published on September 26, 2024

Automattic and WooCommerce’s cease and desist letter to WP Engine and others

written by Richard Best

The saga continues

The saga does indeed continue. On 23 September 2024, Automattic Inc and WooCommerce Inc’s lawyers sent their own cease and desist letter to WP Engine, Silver Lake, and others. To me, these are the key points and assertions:

  • Automattic/WooCommerce own all intellectual property rights in and to the WOOCOMMERCE and WOO trademarks and the exclusive commercial rights to the WORDPRESS trademark;
  • Automattic/WooCommerce assert that WP Engine has violated their intellectual property rights by, they say, doing the following (and note I’m quoting):
    • “promoting its services as bringing ‘WordPress to the masses'” (this is followed by reference to the number of hours WP Engine contributes per week versus the number Automattic contributes each week);
    • “WP Engine’s entire business model is predicated on using [Automattic/WooCommerce’s] trademarks – particularly WORDPRESS, WOOCOMMERCE, and WOO – to mislead consumers into believing there is an association between WP Engine and Automattic” (there’s a reference to examples in Exhibit B which, most unfortunately from a transparency perspective, is not included in the published version of the cease and desist letter);
    • “WP Engine has developed a business generating annual revenues of over $400 million, which has been based entirely on extensive and unauthorized uses of [the] trademarks”.

The cease and desist letter goes on to say:

    • “WP Engine’s infringing commercial uses of [the] trademarks have created consumer confusion as to whether WP Engine is affiliated with [Automattic/WooCommerce]; including many references to WP Engine being ‘WordPress Engine’.”
    • “Negative reviews and comments regarding WP Engine and its offerings are imputed to [Automattic/WooCommerce], thereby tarnishing [their] brands, harming their reputation, and damaging the goodwill [they have] established in [the] marks. [The] unauthorized use of [their] intellectual property has enabled WP Engine to unfairly compete with [them], and has led to unjust enrichment and undue profits.”

The cease and desist letter also asserts that WP Engine has “violated the terms of [its] WordCamp US Sponsorship Agreement, which specified … that ‘any use of the WordPress trademarks is subject to the WordPress Trademark Policy … .” The letter asserts that WP Engine “repeatedly and intentionally violated the WordPress Foundation Trademark Policy’s prohibition on the ‘use [of] the[] [WordPress marks] as part of a product, project, service, domain name, or company name’.

The cease and desist letter says Automattic/WooCommerce are willing to amicably resolve the matter, including through a licensing relationship for use of the trademarks, but until such time as a licence is in place, WP Engine must (among other things):

  • stop all unauthorised use of the trademarks;
  • remove offerings making unauthorised use of the trademarks from any websites and social media accounts under WP Engine’s control; and
  • pay Automattic/WooCommerce compensation, “the specific amount of which may be ascertained once we have an accounting from you … (even a mere 8% royalty on WP Engine’s $400+ million in annual revenue equates to more than $32 million in annual lost licensing revenue for our Client)”.

Descriptive and nominative fair use

I am not a US trademark lawyer, but to my mind much of this ‘case’ falls to be considered by reference to the defences to infringement known as ‘descriptive fair use’ and ‘nominative fair use’ (nominative fair use being the more likely defence).

The International Trademark Association describes ‘descriptive fair use’ and ‘nominative fair use’ as follows:

“Descriptive fair use permits use of another’s trademark to describe the user’s products or services, rather than as a trademark to indicate the source of the goods or services. This usually is appropriate where the trademark concerned has a descriptive meaning in addition to its secondary meaning as a trademark. For example, WD-40 Company’s use of the term “inhibitor” was found to be descriptive fair use of the registered mark THE INHIBITOR when used to describe a long-term corrosion inhibitor (WD-40) product.

Nominative fair use permits use of another’s trademark to refer to the trademark owner’s goods and services associated with the mark. Nominative fair use generally is permissible as long as: (1) the product or service in question is not readily identifiable without use of the trademark; (2) only so much of the mark as is reasonably necessary to identify the product or service is used; and (3) use of the mark does not suggest sponsorship or endorsement by the trademark owner. For example, one could refer to “the professional basketball team from Chicago,” but it is simpler and more understandable to say the Chicago Bulls. Here, the trademark is used only to describe the thing rather than to identify its source, and does not imply sponsorship or endorsement. … .”

I have not seen the exhibits to Automattic/WooCommerce’s cease and desist letter and so cannot comment on all the circumstances in which the companies are asserting that WP Engine has infringed their trademarks or rights as exclusive licensee. However, as a long-time WP Engine customer who is therefore pretty familiar with WP Engine’s website and marketing, it strikes me that at least a good deal of WP Engine’s uses of the words ‘WordPress’, ‘WooCommerce’ and ‘Woo’ are descriptive/nominative in nature and therefore non-infringing. It is certainly not within Automattic/WooCommerce’s power to prevent all descriptive/nominative uses of those words by WP Engine. Context is key. And I do note that WPEngine says things like this on its website:

Who created WooCommerce?

WooCommerce is developed and supported by Automattic, the creators of WordPress.co and Jetpack. The plugin’s development teams also work with hundreds of independent contributors to provide regular updates, new features, and improved security measures that keep your store up-to-date and protected.

And when WP Engine talks about the likes of ‘WooCommerce hosting’ and that the ‘path to WooCommerce® success starts here’, the webpage states expressly in the footer that WooCommerce is a registered trademark of Automattic Inc.

Some reflections

Now, we could get lost in the minutiae of this cease and desist letter for hours or days. But let’s not. Instead, I’ll just make these remarks:

  • In my view there is nothing wrong with using the word ‘WordPress’ descriptively to refer to the content management system that ‘WordPress’ is, including in the context of a commercial offering. That is extraordinarily commonplace, in all manner of commercial contexts.
  • The same applies to descriptive uses of the term ‘WooCommerce’ (e.g., the ecosystem of WooCommerce plugins).
  • In one sense, WP Engine has brought WordPress to the masses (or at least a portion of the masses). Its number of users and its revenue would seem to be evidence of that, not to mention its support for the WordPress and WooCommerce ecosystems.
  • It seems hyperbolic to assert that WP Engine’s entire business model is predicated on using [Automattic/WooCommerce’s] trademarks to mislead consumers into believing there is an association between WP Engine and Automattic. Personally, I have never perceived there to be any such association. Perhaps that reflects my historic knowledge of the WordPress ecosystem, but I just don’t see this. I see the two companies for what they are in the hosting space: competitors.
  • It seems fanciful to suggest that negative reviews of WP Engine are imputed to Automattic. I accept that I don’t know what I don’t know, and of course the exhibits to the cease and desist letter have not been published so we cannot consider them, but I also note that it does not necessarily follow from the existence of some confusion among a probably very small number of the massive community of WordPress users that WP Engine has infringed the trademarks.
  • In terms of the reference to the Trademark Policy and the quoted excerpt from it, I note that Automattic itself has said on ‘X’: ‘We know there is confusion around WordPress trademarks and fair usage. We’re working to get guidance out ASAP’.
  • If WP Engine is misusing the WordPress/WooCommerce/Woo trademarks (and I’m not saying it is), should other WordPress-related businesses be worried? For example, plenty of other WordPress hosting and commercial plugin providers use ‘WooCommerce’ and ‘Woo’ in ways similar to WP Engine. Will we see challenges to them too?
  • Automattic appears to be asserting exclusive rights in relation to commercial use of the ‘WordPress’ trademark, including demanding payment of a large sum of money, when ‘WordPress’ the CMS that we know and love has, for a very long time, been the creation of a large community of contributors. Whilst Automattic is of course the major contributor (for which I’m sure we are all grateful), Automattic does not own all the source code, and does not control large numbers of WordPress contributors. Whilst these points are separate to Automattic’s rights as exclusive licensee of the WordPress trademarks, I make them because this is not a typical situation where a company seeks to assert exclusive trademark-related rights in relation to a product or brand of which it is the sole owner or creator. Questions will doubtless arise as to what the community of developers thinks of this. I assume Automattic is taking that into account.
  • This saga has shifted from an attack at WCUS said to be based on a poor level of contribution by WP Engine back to the community (at that point there was zero reference to trademark issues), to an attack based on asserted trademark infringement, with a demand by one company that has commercialised WordPress for payment of a huge amount of money from a competitor. Perceived ‘insufficient giving back’ by the competitor may be driving some of this, but one might infer from the demand for payment of annual lost trademark licensing revenue that it’s about more than that. Make of that what you will.

You might think I’ve penned this post with the goal of supporting WP Engine over MM and Automattic, given that I’m a long-time WP Engine customer, but I haven’t. As I’ve said many times before, I have a huge amount of respect and gratitude for MM and Automattic, and no one can doubt Matt’s own contributions to WordPress and his charitable contributions to other causes. Any attempts to smear his personal character would be offensive and should, I suggest, be resisted. But, as a long time WordPress user and member (through this site) of the WordPress community, what’s happening here does not sit well with me, from either legal or commercial perspectives.

My heartfelt hope is that none of this gets near a court. My suggestion is for the two companies to appoint a highly-skilled commercial mediator with knowledge of open source communities to help them chart a way forward.

Update: I have now seen the exhibits to Automattic/WooCommerce’s cease and desist letter, as they have been posted on the Automattic website. They make no difference to my views. I can only see one reference to ‘WordPress Engine’ in the context of a third party partner listing on the WPEngine website. That can (and should) be amended to refer to WP Engine instead but there is no evidence in the exhibits of widespread use by WP Engine of the term ‘WordPress Engine’. All other examples of this term being used are on third party sites. I see no evidence in the exhibits on which WP Engine can be held responsible for that.