Interesting that Hacker News folks jumped to the qualitative ideas that boil down to:
1. Dude! You built something cool! He's after you! Cool! You might lose it! Not cool.
2. You need a lawyer.
My immediate response to the "What Now?" was do some research on this guy. Five minutes of Google searching and Ryan is in a much better position knowing who he's dealing with...
Note that knowing about Peter's past legal stuff doesn't change the options:
1. Give up, give in.
2. Stand up and fight.
3. Get a lawyer and decide to do 1 or 2.
That said, here are some links that may be of interest. Please note I have no vested interest in either party - just was curious.