Automattic–WP Engine Term Sheet
automattic.com
automattic.com
>That is not true. Automattic asked for a verbal agreement that WP Engine would give some percentage of their revenue back into WordPress, either in the form of a trademark agreement or employee hours spent on core WordPress.
Tomato-Tomato. Comedy gold.
At this point I hope this goes to court, so things can be properly examined according to law, otherwise it looks like childish tantrum.
Who? Do you have a link?
https://wpengine.com/wp-content/uploads/2024/09/Cease-and-De...
And the quote is out of context.
The article also gives a timetable of conversations that happened between Automattic and WP Engine well in advance; therefore, the demands shouldn't have been a surprise, as claimed.
The whole idea of the separate entities of Wordpress.org, the Wordpress Foundation (which we learned is somehow not the same as Wordpress.org) and Wordpress.com (through Automattic) is nothing more than a smokescreen. If you're in the business of competing with Automattic in delivering Wordpress hosting, start building an exit plan.
In the term sheet, it's phrased as:
> Commit 8% of its revenue in the form of salaries of WP Engine employees working on WordPress core features and functionality to be directed by WordPress.org.
So, pay for employees to be directed by WordPress.org (not Automattic or WordPress Foundation, apparently just Matt).
"2. Fee. In exchange for the License Grant, WP Engine shall do one of the following:
(a) Pay Automattic a royalty fee equal to 8% of its Gross Revenue on a monthly basis, within fifteen days of the end of each month. "Gross Revenue" means all revenue generated by WP Engine from the sale of its services, calculated without deductions for taxes, refunds, or other costs. WP Engine will also provide Automattic a detailed monthly report of its Gross Revenue within fifteen days of the close of each calendar month, including a product line breakdown of all revenues generated. Automattic will have full audit rights.
(b) Commit 8% of its revenue in the form of salaries of WP Engine employees working on WordPress core features and functionality to be directed by WordPress.org. WP Engine will provide Automattic a detailed monthly report demonstrating its fulfillment of this commitment. WordPress.org and Automattic will have full audit rights, including access to employee records and time-tracking.
(c) Some combination of the above two options'
"Automattic will have full audit rights."
"WordPress.org and Automattic will have full audit rights, including access to employee records and time-tracking."
I get that regulatory bodies should have access under certain conditions, but letting a competitor do this? Makes zero sense.
The choice is, "some money and we'll look the other way; or open all your books, and donate 8% of your workforce to wordpress"
Could automattic know the exact numbers in a different way, since WPEngine is not a public company?
You can't just give out confidential employee records to third parties.
Point is that Automattic would have full access to this as well.
Attempts to go fishing in such records would be pretty unlikely to succeed; it'd be an uneforcable request contrary to public policy, with no relevance to such an audit. It would be correctly and easily fought.
It's hard to imagine how any one can read that as anything other than extortion, and at least, that WP Engine's claims are verbatim correct. The level of self-awareness in operation here is concerning, as in, it's kinda spiraling-out-of-control behaviour.
The only way out of this would be, "im having a mental breakdown, i'm retracting everything, please bear with me for 6mo"
More to the point, while WP Engine had the same right as everyone else to download and install the open source software they use, the right to download, install and use doesn't generate a duty for anyone to supply WP Engine with updates, not even for important things like security fixes. It also doesn't generate a duty for the maintainers to treat WP Engine civilly. Or a duty to serve WP Engine in any way.
Someone who operates a free service to all comers is almost 100% free to stop doing that — or at least not constrained by WP Engine's having downloaded or installed some software. Want to firewall away Iran from your free service? No law prevents you. Want to firewall away WP Engine? Again, no law prevents you, and WP Engine appears not to want to sign a contract that would prevent it.
Normally, we go a little further than the law requires of us. WP Engine's made it fairly clear that it's not going further than required of it, so I don't think it has any right to expect more of Automattic/Wordpress.org than the law requires of them.
(FWIW, I've been in this situation: I've been a full-time maintainer of popular open source code, and some people expected me to do work that they didn't see any reason to pay for.)
The cheapest wordpress hosting plan they have is $20/month. Even if they gave every site its own dedicated hardware (they dont), gross margins would be over 50%. Since their hosting infrastructure is shared, actual gross margin is probably over 90%.
8% is still an unreasonable ask, but it shouldn't be anywhere close to their entire net profit.
So, it is true.
"They claim that we demanded money from them around these dates.. not true!"
"So here is the demand for money that we requested they sign, around these dates"
Maybe I'm not reading this correctly but... it seems like the most obvious interpretation.
Also, what is the purpose of listing all these dates when the two companies met? Without knowing the content of these discussions, this list doesn't remotely meet the community's request for transparency.
Like somebody not trying to be deceptive would say "we started talking about trademarks and a commercial relationship in February 2023", but that's not what this post says, and that's not the answer Matt has given in interviews, it's always this strange list of dates instead.
- money directly to Automattic, not the WordPress Foundation.
- employees working on WordPress core, at the direction of Automattic - including looking at their time sheets and employee files.
Neither of this is "back into WordPress", it's "to Automattic". The company that often did prioritize their workers to work on features benefitting WordPress.com users. There actually used to be a constant for checking if running inside WPCOM in WP Core, but they seem to have removed it since. Let's not even talk about Jetpack and carving out shit from your core product, that gives me too many AOSP vs Play Services vibes.
Either way, WP Engine is a competitor of Automattic. This is laughable. I hope they fork WordPress, because I'd feel uncomfortable contributing software to the benefit of such a bully (I am a former contibutor).
This whole situation was handled poorly, but can it really be considered bullying? It definitely speaks to the heart of the eternal problem of open source: the imbalance of givers and takers at the bazaar.
No it's much more like extortion.
And it goes against everything open source has been about.
Matt's just mad he didn't capture the enterprise Wordpress hosting market earlier, with WordPress.com always being aimed at more casual users and Pressable only aquired in 2016.
WordPress.com VIP is a thing though, and I think they've done a great job selling it to huge organisations.
According to https://news.ycombinator.com/item?id=41692300, Matt Mullenweg said at some point in that long interview from a couple of days ago that he was operating WordPress.org personally, rather than the WordPress Foundation as I think people would typically assume.
> > Do you really individually own http://WordPress.org?
> > Not Automattic? Not a different LLC or something? No employees? No board of directors?
> > Just you?
> Just me.
The public license agreement that Automattic has says the license is "perpetual, irrevocable:" https://www.pluginvulnerabilities.com/2024/10/02/matt-mullen...
The license that exists for WordPress.org, which seems to really be just him, doesn't appear to be public. It would be interesting to see who it really is with and what the terms really are.
I cannot imagine "Automattic" has thought this through. There is no ransom agreement in open source, and the very basis of wordpress' success is the absence of such a thing.
What company now, looking at this technology, would touch it with a 100ft pole?
WP Engine has build their success on piggybacking the WordPress trademark, their slogan is "Most Trusted WordPress Hosting and Beyond".
It's probably fair they pay a fee for that.
If they would just use the open source software & would market it as a blog-hosting they would most likely be in the clear.
https://wordpressfoundation.org/trademark-policy/
How does "Most Trusted" differ from "best" which is allowed?
I think the big difference is also the marketing WP Engine is running full on The WordPress hosting.
WPEngine is also offering Headless and WooCommerce as well as WordPress.
So your point makes absolutely no sense.
But that besides the point.
The question is when is a company piggybacking on a brand.
Maybe Automattic is asking for too much, but it’s very clear wp engine strongly benefited from the brand, not only the software. Just Google them now, they are marketing full on with Wordpress.
I don’t see a way how they won’t win this in court.
WP Engine's slogan is: "Most Trusted WordPress Hosting and Beyond"
What the WordPress foundations trademark policy specifically allows is: "the world’s best WordPress themes"
The trademark is owned by the WordPress foundation not Automattic.
https://wordpressfoundation.org/trademark-policy
And it has been a standard in this industry for decades (e.g. LAMP) that saying 'X Hosting' does not mean that you should be considered the owner of X. It just means you host it.
So the idea theyve been protecting their trademark is against their own trademark policy
I don't know if this changes anything, but I'm guessing a lawsuit is coming, so we shall see. But it would be great if people did some research before commenting on the story.
Likewise, the use of "wordpress" as a trademark is clearly permitted when referring to wordpress; it's a common part of trademark law that you can refer to products in this manner. WPE customers do not think WPE is wordpress, it's a host.
cf., "The most trusted platform for WordPress" --https://wpengine.com
Do you have examples of these since you've done so much research ?
Look forward to Automattic also going after companies using the term "WordPress Plugin" as well.
So the Foundation appears to only own the trademarks on paper. Despite that, this is how Matt Mullenweg framed the trademark ownership situation to the community:
"the most central piece of WordPress’s identity, its name, is now fully independent from any company." he also claimed that Automattic had "give[n] up control" of the trademarks. Those statements are demonstrably untrue.
https://ma.tt/2010/09/wordpress-trademark/
https://assignments.uspto.gov/assignments/assignment-tm-4233...
This feels like if you were to go after someone advertising themselves as a "Honda repair shop".
The sibling comment of "The WordPress Theme Portal" makes more sense as it might imply "The (Official) WordPress Theme Portal"
This is the thing about open source is MOST people do not contribute anything. And we’re seeing this trend with the whole Continue.dev situation too. Copy-paste, rebrand, make some money.
I think everyone needs to consider what the O.G. Wordpress team has created—and how many hours of blood, sweat, and tears went in. And then some folks just copy-paste and siphon out their business.
1: https://lukesmith.xyz/articles/why-i-use-the-gpl-and-not-cuc...
(GPL would not help in this specific case — I believe the project is already under the GPL — but his general point still stands.)
The reality is that he had no problem with WPEngine until recently. Just last year he spoke at their conference.
I might be wrong though.
Imagine if Linus prevented companies from saying they offer hosting using Linux.
It was explicitly permitted by the WordPress foundation.
https://news.ycombinator.com/item?id=41643676
“The abbreviation “WP” is not covered by the WordPress trademarks and you are free to use it in any way you see fit.”
Patents are the most problematic. It's why it's important, for instance, for the OSS license to also include a patents-grant that applies to derived works as well, something that (at least in the past) companies like Microsoft and Facebook failed to provide.
Furthermore, even Open-Source foundations and non-profits have trademarks that they protect. Once upon a time, Debian had problems with patching Firefox, as Mozilla did not accept the modifications, leading to a Debian-specific rebranding:
https://en.wikipedia.org/wiki/Debian%E2%80%93Mozilla_tradema...
This issue is also about the free use of WordPress.org APIs. This is like expecting forks of Chromium or of Android to have continued (free) use of Google Play. Obviously, Google Play is not really included in the OSS deal, and it is only through the continued benevolence of Google that alternatives still have access to it.
However, two aspects of WP that were always pain points were: local development and hosting. That's where WP Engine provided solutions.
While being more expensive than other platforms, hosting a WP website with them is a great experience, whether in terms of installing, managing, or reliability.
And recently, I had to update an old WP instance for a client. Having no local install available, I looked into new tools to setup one. Turns out WP Engine's tool called "Local" is what Automattic should have provided 10 years ago. It's a fantastic piece of software that "just works"!
It seems like Automattic feels jealous that another company managed to build upon their own open source product to provide a better experience in every aspect (development, managing, hosting) and are making bank. Good for WP Engine.
You're just proving my point mate.
It's mind boggling.
That's a really bad look, WordPress Foundation.
I mean, "partners" in the sense of "The same person runs both"
I’m leaving the conversation thinking the relation between automattic and Wordpress dot org is one of tax avoidance. What am I missing?
Automattic's desire seems totally reasonable. Their execution of expressing that desire seems to be totally unreasonable.
> The WordPress Foundation is a 501(c)3 non-profit organization...
I don’t find it reasonable for a non-profit organization to demand payment from users to one of its donors, Automattic, instead of encouraging donations to itself.
I generally assume other people are smarter than more competent than I am, especially successful people like Matt. That’s why I asked the question. There has to be more to the story, right?
Is it as simple as Matt didn’t even talk to a lawyer before doing all of this for whatever reason?
If I wanted to say “I made them an offer” but wanted to be sure they wouldn’t take me up on the offer, this is the sort of term sheet I’d use.
>Although submissions cannot be downvoted, flags act as a "super" downvote and enough flags will strongly reduce the rank of the submission, or kill it entirely (flagging is supposed to be used for submissions which break the site guidelines, but that isn't always the case in practice).
Automattic and Mullenweg continue to surprise me at seemingly every turn. I also find some of the language being used ostensibly BY Automattic in these blog posts just incredible, coming from what is supposed to be a respected and respectable organisation. I'm seriously considering whether to ever use WordPress again for projects.
Automattic does not like the competition, so they pick one actor in the WP ecosystem _randomly_ and try to force this on to them.
For anybody who is running a service that uses WP this is a threat. You can't be sure that if you build on that ecosystem that one day Matt Mullenweg does not like you and will try to extort money from you, too.