I wonder if it's possible to optimize the cost differential. (probably not for a 2 person startup, but maybe a little bigger). But once it's terminal, clear you can't win, just dump all the money into making lots of specific, esoteric claims that require Giant Law Firm to spend hundreds of hours researching and responding to.

Loser pays legal fees, but if i can get you to spend an order of magnitude or two more than my dying company is worth, well, that's the kind of flameout i could take some satisfaction in.

edit

Now that i think about it a bit, contacting the oppositions' customers and asking about their record retention policies seems like a great way to go. not a subpoena, just several repeated enquiries, an email, a letter, follow up with a phone call or two about about how do you store records, how many records might you have about opposition company, who are the employees who interact with the opposition company. Hit the VP's of HR, Accounting and whoever does legal.

You could probably get some really nice targeted facebook advertising for that set of people, "been scammed by x? call us"

Social engineering is scary.

In the US, the loser doesn't even always pay the legal fees. It depends.

Have you watched 'Halt and catch fire'?

The first or second episode sets up a legal battle, and the main character basically points out his company's staff lawyer to the opposition and says something to the effect of "We pay him $X, you can put hundreds of lawyers on this suit, we'll just have him."

In other words,head we win,tail you loose,according to Jeff Smith.Sounds like a bully to me.