I've had something like this happen with a bunch of guys cloning my software and changing the URL to offer a competing service.

I've also had a funded competitor copy our business model and attempt to compete.

I sued the first one, the other one we outcompeted in spite of a 30:1 funding discrepancy. Regardless, these things are distractions and some funded bunch of cowboys destroying the market for you when you've spent a long time to get established can be a real problem. Even if they go under they'll do a lot of damage, not just to you, but also to their customers and possibly the whole field as a consequence of their activities. For instance: to offer the product for free because they're burning investor cash.

I hear you, but what's the alternative? Are you advocating for software patents?

If you're just saying that an API or a website is copyrighted and can't be ripped off verbatim, that sounds more reasonable to me. But still, it's trivial to copy but then make minor cosmetic changes (especially with AI). Then we're back to a very troublesome gray area.

It all depends on what has been copied. If privileged info from the YC application was used they should be sued into the ground for that but I can't imagine that YC would ever let that happen. If they copied code, text or images from the product or webpages they should be slammed for that too. But if they just decided to clone the concept and did all the legwork themselves that would be a different matter.

The fact that they infiltrated the OPs comms channels certainly doesn't make them look good.

Did anything come of the lawsuit?