Chess Sets Online Retailing - Dealing with Aggressive Unethical Competition

As a chess set online retailer - what does one do when competitors get closer and closer to the throat? When they threaten to make a ‘personal visit’? When they publish some web defamation? And steal photography and other content to use in selling their knock-offs?
A maturing internet has allowed opportunities previously having high entry barriers. Hundreds of thousands of have managed to join the two skills (technical and business) they have to jump into the murky waters of online commerce. The example of chess set retailing is real and current. The victim is a successful niche chess set company who suddenly appeared on the web by utilizing SEO skills, techie ability and a love of chess. After a year of trading, one of the chess competition noticed and started with threats and intimidation. But this has happened across many industries previously dominated by other web sites. What’s the best course of action and reaction?
Flattery. A fellow retailer has flattered us by recognising a loss of income from our attempts at online marketing of chess sets. Hell, we’re good! - what other industries might we impact?
No such thing as bad publicity. Accept any actual reference to our higher prices as publicity - keep sending them over to us.
Losing focus. We seem to be occupying the aggressor somewhat. Well, that’s something too. Whilst he’s focusing his energies on us, he’s distracting himself from his own company.
Poor business. Our chess retailing aggressor clearly has a poorer business model than us if he has to resort to this kind of behaviour. Harassing the competition in some mafia style suggests a bullying manner that would be better channelled elsewhere.
Legal action. ‘Theft’ of intellectual property rights (chess photography, chess product names, chess product descriptions…)- whether yielding any advantage or not - is just that - theft. So real court action may be required to bring the matter to a conclusion.
Conclusion
The new world is here. Online retailing and competition is a fact of life. Competition is good for consumers and good for business improvement. But as in the schoolground and in the High Street/Mall there are aggressive unethical bullies online too. Actions can be taken to offset the aggression, evasive tactics can be used with some success, but the end game may involve taking hooligans to the law to stop the murky activities affecting the peace of our lives and helping us have societies populated with people having admirable qualities we all look up to.