# WP Engine vs. Automattic: A Trademark Use Legal Controversy
In a recent legal confrontation, **WP Engine** (WPE), a well-known managed hosting service for WordPress sites, has entered into conflict with **Automattic**, the organization responsible for WordPress.com and WooCommerce. The dispute revolves around the claimed unauthorized use of trademarks possessed by Automattic, including the prominent **WordPress** and **WooCommerce** names. The core of the lawsuit raises the issue of whether WP Engine’s application of these trademarks falls under **fair use** in trademark legislation or if it violates Automattic’s intellectual property rights.
## The Heart of the Disagreement: Trademark Application
WP Engine’s legal action contends that its use of the WordPress and WooCommerce trademarks constitutes **nominative fair use**, indicating that the company employs the marks to refer to the open-source software and plugins that are essential to its offerings. WP Engine delivers managed WordPress hosting services, which inherently require the utilization of WordPress and WooCommerce software for the websites of its customers. WP Engine argues that this usage aligns with **established trademark law** and conforms to **WordPress’ own guidelines** regarding trademark use.
In its legal filing, WP Engine maintains that it does not aim to mislead consumers or suggest any official connection with Automattic. Rather, it claims that the use of these marks is vital to accurately describe the services it offers, which are built upon the WordPress platform. WP Engine asserts that this practice is typical among companies in the WordPress space, where businesses frequently mention WordPress and WooCommerce to delineate their service offerings.
## Automattic’s Claims of Infringement
Conversely, Automattic views the situation differently. The company contends that WP Engine’s application of its trademarks is **extensive and unauthorized**, leading to consumer confusion. According to **Exhibit A** of the lawsuit, Automattic communicated with WP Engine CEO Heather Brunner, alleging that the hosting service infringed on its intellectual property rights. This correspondence, drafted by a trademark attorney representing Automattic and WooCommerce, outlines Automattic’s ownership of the **WordPress** and **WooCommerce** trademarks and claims that WP Engine’s use of these marks is not sanctioned.
The communication further asserts that WP Engine’s business operations are “based on using our Client’s trademarks… to mislead consumers into believing there is an association between WP Engine and Automattic.” Automattic contends that this purported infringement has resulted in consumer confusion, leading to the impression that WP Engine is endorsed or sponsored by Automattic, which is not the case.
Additionally, Automattic argues that WP Engine’s usage of its trademarks has led to substantial financial damages. The letter estimates that WP Engine’s unauthorized trademark use has cost Automattic over **$32 million in annual licensing revenue**, considering an 8% royalty on WP Engine’s reported **$400+ million in yearly revenue**.
## Automattic’s Legal Threats
In its correspondence, Automattic warned of initiating legal action against WP Engine, seeking a court order to halt the alleged trademark violation, as well as **actual damages**, **disgorgement of profits**, and **reimbursement of legal fees**. Automattic also requested an account of WP Engine’s profits, implying that the company has improperly profited from its unauthorized application of the WordPress and WooCommerce trademarks.
Automattic’s letter makes it evident that the company is ready to pursue legal measures if WP Engine does not adhere to its requests. The letter reinforces Automattic’s stance that it possesses exclusive commercial rights to enforce and sublicense the WordPress trademark, which is owned by the **WordPress Foundation**.
## WP Engine’s Legal Counteraction
In reaction to Automattic’s claims, WP Engine filed a lawsuit seeking a **declaratory judgment** affirming that it does not infringe or diminish any valid trademark rights held by Automattic or its subsidiaries. WP Engine seeks a court ruling that its use of the WordPress and WooCommerce trademarks is legitimate and does not breach Automattic’s intellectual property rights.
WP Engine’s lawsuit also pursues **compensatory and punitive damages**, asserting that Automattic’s allegations lack merit and have harmed WP Engine’s business interests. The hosting service asserts that its application of the trademarks is both **fair** and **necessary** for accurately describing the services it provides to its clientele.
## Nominative Fair Use: An Important Legal Principle
A pivotal issue in this matter is the doctrine of **nominative fair use** within trademark law. Nominative fair use permits a business to utilize a trademark owned by another organization to denote the trademarked product or service, provided specific conditions are fulfilled. These
