WP Engine had their day in court docket, nevertheless it didn’t go completely of their favor, as Choose Araceli Martínez-Olguín dominated the request for a preliminary injunction was too obscure. Nevertheless, the decide stated they have been “inclined to grant some type of injunction.”
“That’s How You Set A Ransom”
The lawyer for plaintiff supplied new particulars about what occurred behind the scenes on the day that Matt Mullenweg went “nuclear” on WP Engine at WordCamp USA. She first defined that Mullenweg’s demand for trademark license was a sham. Then confirmed how Mullenweg did not implement his trademark declare for fifteen years.
Among the many new particulars was that Mullenweg’s demand for $32 million {dollars} was communicated in a one-page letter and that the settlement was for a seven yr interval that mechanically renews “basically perpetually.” She then revealed new particulars of how Mullenweg selected the $32 million {dollars}, explaining that it was simply “a quantity” that Mullenweg felt WP Engine was in a position to pay.
The purpose of this a part of the plaintiff’s argument was to indicate that the royalty price that Mullenweg was asking for was not based mostly on any worth of the mark however quite the speed was a determine that Mullenweg felt he was in a position to squeeze out of WP Engine, saying that the speed was “set in an extortionate method.”
WP Engine’s lawyer supplied this narrative of occasions:
“We all know that defendants had no proper to supply that, quote unquote, service as a result of it’s a pretext. It’s a sham. …You take a look at the report. We see that for 15 years, WP Engine was making nominative truthful use of the WordPress mark as your complete neighborhood did for 15 years with out a lot as a shoulder faucet. ‘Excuse me.’ ‘Right here’s an e-mail.’ ‘Right here’s a textual content.’ ‘Right here’s a stop and desist letter.’ Nothing.
Nothing in any respect, till the morning of September twentieth after we obtain this one web page weird trademark license settlement. That’s not how trademark house owners function. That isn’t the way you defend and implement your mark. You don’t wait 15 years after which drop a requirement for thirty two million {dollars} on the recipient.
We additionally know from the value set, …this one web page license listed a worth of eight % of WP Engines gross revenues, which occurs to quantity to thirty two million {dollars}. And it set that worth for a seven yr interval to mechanically renew basically perpetually.
And when requested, how did you set that worth? Mr. Mullenweg, defendant Matthew Mullenweg, acknowledged, “it’s what I believed they may pay. We did an evaluation to determine what the free money circulation was. That’s how we set that quantity.” That’s not the way you calculate a royalty. That’s the way you set a ransom.”
Choose Questioned WP Engine’s Attorneys
There was a degree within the proceedings the place the Choose Araceli Martínez-Olguín requested WP Engine’s attorneys what proper to continued acces did they’ve with out paying any type of license.
WP Engine’s lawyer answered:
“So there’s simply merely no connection there, your Honor, in any respect. The take a look at is just not: does WP Engine have a proper to be free from a trademark license?”
The lawyer additionally identified that free entry to WordPress.org was the “established order” for fifteen years, which modified on September twentieth when Mullenweg initiated his dispute with WP Engine.
Automattic’s Protection Tactic
The lawyer for Automattic and Mullenweg argued a number of technical factors as to why the decide shouldn’t grant an injunction. One key level was that WP Engine’s extortion declare, below California legislation, fails as a result of California courts don’t acknowledge a non-public reason behind motion for tried extortion below the California Penal Code.
They then level out that the case legislation WP Engine’s lawyer is counting on (Tran v. Winn) considerations a special authorized idea (duress and rescission) quite than extortion. They stated that the plaintiff’s authorized principle doesn’t match extortion claims and entails completely different authorized rules.
Automattic’s lawyer then follows that up by stating that even when WP Engine may use the Tran v. Winn case legislation, the plaintiff’s argument nonetheless fails below the opposite case legislation they’re citing to base their claims on (Levitt case). They argue that the plaintiff can not meet the authorized customary for financial extortion as a result of they’re unable to indicate that the defendant had no proper to demand cost for the companies in query.
An argument made by Automattic’s lawyer in regards to the trademark license demand is that the plaintiffs omit a second choice within the license, which was to offer volunteer hours equal to the cost. Shaw additionally identified that Mullenweg had made a reference to negotiating the phrases the next week, however WP Engine by no means responded to his message.
The lawyer stated:
“…there’s a textual content from Mr. Mullenweg through which he says, or he makes reference to even negotiating the phrases the next week. They simply by no means responded to Mr. Mullenweg’s response.”
What The Choose Mentioned
Choose Araceli Martínez-Olguín had rather a lot to untangle, with maybe the principle factor being that WP Engine’s injunction was too obscure.
The decide gave a sign of what route she was leaning but additionally defined that the request was a “non-starter.”
“Having reviewed every part, I’m inclined to grant some type of injunction. Right here’s the issue that I’ve along with your proposed injunction, although. It is a nonstarter as a result of it’s exceedingly obscure.”
The decide then inspired the events to work collectively to slender down the preliminary injunction to one thing that isn’t obscure and failing that they may submit “dueling submissions.” There was some backwards and forwards about what date to return to court docket with, with WP Engine asking for a Friday date and ultimately agreeing to return on Tuesday, December third.
Response To Preliminary Injunction Listening to
A lawyer reside running a blog the proceedings on Bluesky wrote up their take on what occurred:
“I knew that WPE was in excellent form when the opening query was “inform me about your one finest shot” as a result of that’s not typically a query you’d ask when you thought nothing had any advantage.
I believed that tortious interference was the perfect shot. I’m fairly positive WordPress’s legal professionals did too.”
And followed up with:
“I used to be fairly positive that this was leaning towards a grant on the PI. I feel that Automattic was near getting their different, however Mack might have saved issues along with his tech stroll by means of.”
He supplied a superb opinion in regards to the decide, saying that she seems to acknowledge that a number of the technical points are outdoors of her space of experience and that she expressed a willingness to ask questions to higher perceive.
He offered his opinion in regards to the decide and the ultimate final result:
“It’s clear that the Choose isn’t overly technical in her background, however is conscious of that and is keen to hear attentively – this is superb, and never a common federal decide trait.
It will likely be fascinating to see what we get on Monday.
Nearly definitely, dueling proposals.”
This abstract of what occurred in court docket relies on a live blog and a post on Bluesky by a lawyer of the proceedings over Zoom.
Featured Picture by Shutterstock/Jidvg
