The conflict within the WordPress community is escalating into a potential legal battle over trademark issues. Following a cease-and-desist notice from WP Engine to Automattic, demanding that CEO Matt Mullenweg stop publicly criticizing the company, Automattic has responded with its own cease-and-desist letter, alleging multiple infringements of trademarks, including "WordPress" and "WooCommerce."

The situation arose after Mullenweg labeled WP Engine as a "cancer to WordPress," accusing the hosting service of profiting off the open-source project while contributing little to the community. In Automattic's letter, dated Monday, the company claims that WP Engine has generated over $400 million in revenue through the unauthorized use of its WordPress trademark, which Automattic asserts it holds exclusive commercial rights to via the WordPress Foundation. 

Automattic also contends that WP Engine has misled consumers into thinking there is a direct affiliation between the two companies. The letter states, “Your unauthorized use of our Client’s trademarks infringes on their rights and dilutes their famous and well-known marks. Negative reviews and comments regarding WP Engine and its offerings are imputed to our Client, thereby tarnishing our Client’s brands, harming their reputation, and damaging the goodwill our Client has established in its marks.”

Additionally, Automattic alleges that WP Engine's use of its intellectual property has allowed the company to unfairly compete and gain unjust profits. Automattic is demanding compensation for these profits and warns that if an amicable resolution is not reached, it may pursue a civil injunction against WP Engine.

Here’s a concise summary of the WordPress community context based on your colleague Paul Sawers' insights:

WordPress powers over 40% of the web, allowing individuals and companies to create websites using its open-source platform. This has led to the emergence of several businesses, including Automattic, founded by Matt Mullenweg in 2005 to monetize the project he created two years earlier, and WP Engine, a managed WordPress hosting provider that has raised nearly $300 million in funding, primarily from a $250 million investment by Silver Lake in 2018.

In the recent cease-and-desist letter from WP Engine to Automattic, WP Engine defended its use of the "WordPress" trademark under fair use laws, criticizing Automattic for misunderstanding trademark law and the WordPress Foundation’s trademark policy. The letter claimed that Mullenweg demanded a substantial ongoing percentage of WP Engine's gross revenues—amounting to tens of millions of dollars—for a license to use trademarks like "WordPress." When these demands were not met, WP Engine accused Mullenweg of making false claims to disparage the company publicly.

While Automattic's letter did not address Mullenweg's comments, he has criticized WP Engine for not contributing enough to the WordPress community and for offering what he termed a "cheap knock-off" version of WordPress. WP Engine countered this characterization and accused Mullenweg of launching a smear campaign that has impacted its business.

The situation could lead to a prolonged legal dispute between the two companies, which some fear might adversely affect specialized WordPress hosting providers. Recently, the WordPress Foundation updated its Trademark Policy to address concerns regarding WP Engine, stating that many users mistakenly associate the hosting service with an official connection to WordPress, despite WP Engine never having contributed to the Foundation.