[tothrowaway]

I wonder if this person knows that you do not have to respond to a C&D or submit to its demands? If a party makes a frivolous demand like this, yes, they can file a lawsuit against you. But the chances of that happening are quite slim. Even the most unethical lawyers hesitate to bring junk like this in front of a judge.

Unfortunately, if you talk to a typical lawyer, they will always say that it is in your best (legal) interest to send a strong response back (at a mere $300 hour, or $3000 flat fee).