WP Engine has escalated its legal fight with Automattic, alleging in a newly amended complaint that the WordPress.com parent planned to pursue royalty payments from 10 competing hosts for using the WordPress brand and attempted to pressure Stripe to terminate WP Engine’s payment processing account. Automattic has not commented on the fresh claims.
What the new court filing alleges about licensing push
In its third amended complaint, WP Engine says discovery unsealed internal communications indicating Automattic prepared a broader enforcement push, mirroring demands already made of WP Engine. The filing asserts one large provider, Newfold Digital—owner of Bluehost and HostGator—has been paying for use of WordPress-related marks, and that Automattic held discussions with additional hosts whose names remain redacted in court documents.
WP Engine further alleges that Automattic CEO and WordPress co-founder Matt Mullenweg contacted a senior Stripe executive after WP Engine first sued, urging the processor to cut ties with the host. The complaint characterizes the outreach as a bid to disrupt WP Engine’s operations mid-litigation. It also cites internal language attributed to Mullenweg describing a “carrot and stick” approach and a “nuclear” posture toward WP Engine if it declined to pay.
Automattic has previously counterclaimed that WP Engine overstepped on trademark usage and misled customers in marketing, while WP Engine’s original suit accuses Mullenweg and Automattic of defamation and abusing control of the WordPress brand to harm a rival. None of the latest allegations has been adjudicated.
Inside the 8% royalty demand at the center of dispute
Central to the rift is an 8% royalty on WP Engine’s monthly gross revenue for use of the WordPress name. Mullenweg previously said the figure stemmed from a business analysis, estimating the payment would be roughly $32 million while leaving WP Engine cash-flow positive. That math implies total annualized revenue in the neighborhood of $400 million, consistent with industry estimates that place WP Engine among the largest managed WordPress providers globally.
Royalty structures tied to trademarks are not rare in software-adjacent markets. What is unusual here is the scale and the target: infrastructure companies that build atop an open-source ecosystem. Hosting margins typically sit below pure-play SaaS, meaning even low-single-digit royalties can materially alter pricing or investment in support, tooling, and performance.
How trademarks and open-source norms are colliding here
WordPress’s code is licensed under the GPL, which permits broad reuse, but trademarks are governed separately. That split is common in open source—projects protect names and logos to prevent user confusion or false endorsement, even as they encourage code reuse. Notable precedents include Mozilla’s historical enforcement around Firefox branding and Red Hat’s trademark rules for enterprise Linux derivatives.
The crux is where enforcement becomes monetization. WP Engine frames Automattic’s approach as a sweeping revenue grab targeting independent providers in a market WordPress largely enables. Automattic contends that aggressive branding by hosts can mislead customers about what is “official,” which, it argues, harms the project’s reputation and user experience. With WordPress powering more than 43% of all websites, according to W3Techs, even modest shifts in policy can ripple across millions of site owners and agencies.
Potential impact on hosting providers and everyday users
A campaign to levy royalties on multiple hosts would concentrate leverage in the hands of a single commercial steward and could reorder the economics of managed WordPress. Providers might pass costs to customers, scale back sponsorships of core contributors, or differentiate more aggressively through proprietary tooling. Conversely, clearer trademark rules could reduce misleading claims and improve accountability around performance and support guarantees tied to the WordPress name.
The managed WordPress landscape spans global players and specialists serving agencies and SMBs. While the complaint redacts most company names, the cohort plausibly includes high-visibility managed hosts, traditional shared hosts with WordPress plans, and cloud platforms courting WordPress workloads. Any uniform royalty regime would land differently across these models, potentially advantaging vertically integrated providers or those with deeper margins.
Key legal questions the court must resolve in this case
Several issues now sit before the court: whether sought royalties reflect lawful trademark licensing or anticompetitive pressure; whether outreach to Stripe constitutes tortious interference; and where the line falls between nominative fair use and brand misuse in host marketing. The outcome could set a durable precedent for how open-source flagship brands police commercial ecosystems that depend on them.
For now, the two sides are digging in. WP Engine’s new allegations, drawn from discovery and unredacted communications, paint a picture of a coordinated strategy beyond one company. Automattic’s counterview holds that stronger enforcement is overdue. However the court rules, the case is poised to reshape how WordPress’s name—and by extension, a vast slice of the web—interacts with the business realities of hosting at scale.
