The choose overseeing the authorized battle between WP Engine versus Automattic and Matt Mullenweg issued a ruling that absolutely dismissed two of WP Engine’s claims, allowed a number of to proceed, and gave WP Engine the prospect to amend others.
9 Claims Allowed To Proceed – One Partially Survives
Counts 1 & 2
- Rely 1: Intentional Interference with Contractual Relations
- Rely 2: Intentional Interference with Potential Financial Benefit
These two counts survived the movement to dismiss. Which means WP Engine can attempt to show that Automattic/Mullenweg interfered with its contracts and enterprise alternatives. This reveals that the choose didn’t throw out WP Engine’s total “you’re sabotaging our enterprise” strategy. If WP Engine wins on these counts they could possibly be eligible to obtain damages.
In complete, the choose’s order allowed 9 claims to proceed and one to partially survive.
These are the remaining claims that survived and are allowed to proceed:
- CFAA Unauthorized Entry (Rely 19):
Tied to allegations that Automattic and Mullenweg covertly changed WP Engine’s ACF plugin with their very own SCF plugin on buyer websites with out authorization. - Unfair Competitors (Rely 5)
Linked to claims that Automattic’s conduct, together with unauthorized plugin substitute and trademark points, amounted to illegal and unfair enterprise practices below California regulation. - Defamation (Rely 9) & Commerce Libel (Rely 10)
Statements on WordPress.org alleging WP Engine provided a “low-cost knock-off” of WordPress and that WP Engine delivered a “bastardized simulacra of WordPress’s GPL code.” - Slander (Rely 11):
Based mostly on public remarks Mullenweg made at WordCamp US and in a livestreamed interview the place Mullenweg described WP Engine as “parasitic” and damaging to the open-source group. - Lanham Act (Rely 17: Unfair Competitors) & Lanham Act (Rely 18: False Promoting)
Automattic and Mullenweg filed a movement to partially dismiss these counts however the movement was not granted, so these two counts transfer ahead.
That is the declare that partially survived:
Promissory Estoppel (Rely 6)
That is based mostly on particular guarantees, equivalent to free plugin internet hosting on wordpress.org, which the court docket discovered particular sufficient to proceed, whereas broader statements like “everyone seems to be welcome” had been too obscure to assist the declare.
Two Claims Dismissed With Depart To Amend
The choose dismissed two of the claims with “go away to amend,” which suggests the court docket discovered a difficulty with how WP Engine pleaded their claims. The claims weren’t legally ample, however the choose gave WP Engine the choice to replace its criticism to repair the issues. If WP Engine amends efficiently, these claims can return to the case.
The 2 claims dismissed with go away to amend are:
1. Antitrust claims of monopolization, tried monopolization, and unlawful tying (Sherman Act & Cartwright Act).
On the antitrust claims, the Courtroom discovered WP Engine did not outline a related market, stating:
“…customers coming into the WordPress ecosystem by electing a WordPress internet content material administration system would know they had been locked-in to WordPress aftermarkets. Mullenweg’s purported deception and extortionate acts didn’t change that elementary working precept of the WordPress market.”
2. CFAA extortion declare (Rely 3): WP Engine alleged Automattic threatened to dam wordpress.org entry and demanded licensing charges.
Relating to the extortion claims, WP Engine alleged that Automattic and Mullenweg violated the Pc Fraud and Abuse Act (CFAA) by threatening to dam WP Engine’s entry to wordpress.org and demanding licensing charges.
The Courtroom dismissed this declare with go away to amend, discovering the allegations didn’t sufficiently set up “extortion” below CFAA requirements. The choose famous that merely threatening to dam entry, even coupled with calls for for licensing, didn’t meet the statutory necessities as pled. Nevertheless, WP Engine has been given time to amend the criticism (“with go away to amend”).
Two Claims Absolutely Dismissed
Two of WP Engine’s claims had been absolutely dismissed:
- Rely 4: Tried Extortion (California Penal Code)
- Rely 16: Trademark Misuse
Rely 4
Rely 4 was dismissed as a result of the California Penal Code permits authorities prosecutors to carry prison expenses for tried extortion, but it surely doesn’t give personal events like WP Engine the appropriate to sue below that statute. The dismissal was not about whether or not Automattic’s conduct could possibly be thought of extortion however about whether or not WP Engine had the authorized authority to make use of that regulation in a civil case.
Rely 16
The court docket dismissed Rely 16 as a result of trademark misuse is simply acknowledged as a protection, not as a lawsuit that may be filed by itself. WP Engine should still elevate trademark misuse later if Automattic tries to implement logos in opposition to it.
The precise wording is:
“With no authority from WPEngine that authorizes pleading declaratory judgment of trademark misuse as a standalone reason for motion quite than an affirmative protection, the Courtroom GRANTS Defendants’ movement to dismiss Rely 16, with out prejudice to WPEngine asserting it as an affirmative protection if acceptable later on this litigation.”
Submit By Matt Mullenweg About The Ruling
Automattic CEO and WordPress co-founder posted an upbeat weblog publish in regards to the court docket ruling that provided a simplified abstract of the court docket order, which is ok, however simplification can miss particulars. He’s proper that the choice narrows the case and that the tried extortion declare is out for good.
He wrote:
“…the court docket dismissed a number of of WP Engine and Silver Lake’s most severe claims — antitrust, monopolization, and extortion have been knocked out!”
The tried extortion below California Penal Code (Rely 4) was certainly “knocked out.” However the Pc Fraud and Abuse Act (CFAA) extortion declare (Rely 3) was dismissed with go away to amend, that means WP Engine has the chance to strive once more.
The antitrust and monopolization claims (Counts 12–15) had been additionally dismissed however with go away to amend, that means they too are usually not completely gone.
His publish is technically appropriate.
However the simplification leaves out what the choose allowed to maneuver ahead:
Automattic’s movement to dismiss Rely 1 (intentional interference with contractual relations) and Rely 2 (intentional interference with potential financial relations) had been denied, and each will transfer ahead, doubtlessly making WP Engine eligible to obtain damages in the event that they win on these counts.
Then there are the others which can be shifting ahead:
- CFAA (Rely 19): That is vital. It alleges Automattic covertly swapped WP Engine’s widely-used ACF plugin with its personal SCF plugin on buyer websites with out consent. The court docket discovered these allegations believable sufficient to maneuver ahead
- Unfair Competitors (Rely 5): Linked to claims that Automattic’s conduct, together with unauthorized plugin substitute and trademark points, amounted to illegal and unfair enterprise practices below California regulation. (The court docket particularly pointed to the surviving CFAA and Lanham Act claims because the authorized foundation for letting this proceed.)
- Defamation (Rely 9) & Commerce Libel (Rely 10): Based mostly on statements on WordPress.org alleging WP Engine provided a “low-cost knock-off” of WordPress and that WP Engine delivered a “bastardized simulacra of WordPress’s GPL code.”
- Slander (Rely 11): Grounded in public remarks Mullenweg made at WordCamp US and in a livestreamed interview the place he described WP Engine as “parasitic” and damaging to the open-source group.
- Lanham Act (Rely 17: Unfair Competitors) & Lanham Act (Rely 18: False Promoting): Defendants sought partial dismissal, however the court docket declined. Each counts stay dwell and transfer ahead.
Featured Picture by Shutterstock/Kaspars Grinvalds
