Malcolm,
  With regards to the threat of litigation I seem to vaguely recall one of your successes in this area.  Didn't you have an actual lawyer, or a legal letterhead, at your disposal or something?  These are nice imposing assets to have.  I'm not sure that I could convince this guy on my own because, from what little I know about psyhchotics, they're never wrong and the rest of the world is crazy.  I'd love it if it worked however.  Maybe I could design my own letterhead - "Shark, Shyster, and Shill, Attorneys at Law."
  With regards to his selling on eBay, I don't know, it's possible.  He probably has a sales outlet of some sort, however, because his first email to me asked if I had more than one available. Given that I don't I'm probably not really head-to-head competition.
Marty