WordPress developer Automattic reveals it demanded 8% of revenue as licensing fee from WP Engine

Following the announcement by Automattic, the developer of WordPress, that it would no longer license WordPress to WP Engine , a hosting platform specializing in WordPress, Automattic has revealed the license agreement that it was planning to enter into with WP Engine.

Automattic—WP Engine Term Sheet – Automattic
https://automattic.com/2024/10/01/wpe-terms/

Trademark License Agreement
(PDF file) https://automattic.com/wp-content/uploads/2024/09/term-sheet-wp-engine-inc.-automattic-trademark-license_09.19.2024-1.pdf

WordPress biz Automattic details WP Engine deal demands • The Register
https://www.theregister.com/2024/10/02/automattic_wp_engine_wordpress_license/

WordPress is an open source site content management platform, and Automattic, founded by WordPress creator Matt Mullenweg, is one of the companies that contribute to the development of WordPress. The WordPress open source project and trademark license are managed by the WordPress Foundation, a non-profit organization founded by Mullenweg.

The incident began at WordCamp US 2024, a WordPress user event held in September 2024, when Mullenweg said on stage that WP Engine is a cancer for WordPress.

Automattic CEO and WordPress developer Matt Mullenweg sharply criticizes WP Engine as 'the cancer of WordPress' - GIGAZINE

Mr. Marenweg pointed out that WP Engine turns off WordPress revision control by default, and criticized WP Engine for 'modifying WordPress and offering it as WordPress, despite its low contribution and investment in the WordPress community.'

Automattic then sent WP Engine a cease and desist letter for use of the WordPress trademark and announced that it would block WP Engine's access to wordpress.org.

WordPress announces it will block access from WP Engine, stating that 'users whose sites are broken should ask WP Engine to fix them' - GIGAZINE

WP Engine has demanded that Mullenweg and Automattic retract their statements. At the same time, WP Engine's Chief Legal Officer Holly Hogan pointed out that 'Mullenweg demanded large sums of money from WP Engine and threatened to use 'scorched earth' tactics if WP Engine did not comply with his demands. When WP Engine did not comply with his demands, Mullenweg made false and libelous statements on stage at WordCamp US 2024.'

In response to WP Engine's allegation that it was threatened by Mr. Mullenweg, Automattic said, 'That is not true. Automattic has verbally agreed with WP Engine to give a percentage of its revenues back to WordPress in the form of license agreements or employee time spent developing WordPress.'

In addition, Automattic released the full text of the contract terms presented to WP Engine on September 20, 2024. The terms included: 'Pay 8% of monthly revenue as royalties or allocate employee salaries equivalent to 8% of monthly revenue to WordPress core development,' 'Prohibit modification of Automattic or its affiliates' software in a manner that interferes with Automattic's partnership,' and 'The contract period is seven years, automatically renewed. Renewal can be refused with 90 days' notice.'

Automattic also provided a chronological explanation of its negotiations with WP Engine. The negotiations apparently began around February 2023, but Automattic expressed concern when they had not been concluded by July 2024. Automattic also claimed that Mullenweg called WP Engine on September 19 and 20, 2024, but received no response.

Automattic has released the full terms of the agreement, but has expressed anger in the comments, saying, 'Given WP Engine's conduct, deception, and incompetence since September 20, 2024, these terms are no longer sufficient.'