There are some really bad answers in here. The way you handle this situation will decide your fate, you need to speak with someone who has the expertise to explain to you what your options are and what potential consequences each will have.
Since money is a problem you may want to follow this up with a question like "Ask HN: Does anyone know a patent attorney that will help me pro bono?"
Be aware that if they file a complaint you will have to have a lawyer licensed to practice in the state where the complaint is filed (PITA).
But realistically patents are just a giant cash pissing contest where the two parties throw as much cash in each others direction as they can until one of them runs out of money.
You appear to have prior art that is in the public domain, two things that alone would mean that the patent should never have been granted in the first place.
As you have said lawyers are expensive, but in the interim all correspondence you have should refer time and again to your prior art and the fact that it was in the public domain. The main reason for this is that you are framing the argument should it ever get to court, not them.
One other thing you could add now is a counter-claim, as in, "if they wish to continue along this line of C&D you will apply for invalidation on the basis of existing evidence widely available on the internet".
Finally you should offer a resolution to the dispute, based on the evidence of prior art you will be happy to accept an on-going licence fee paid to you as a settlement and that youy would be happy to meet with them to discuss the details. The sum should not be outrageous, but something "reasonable" and affordable.
In this way you demonstrate that you are making an effort to be reasonable.
Please talk to a lawyer. Anyone on this board who is not a patent lawyer is talking out of their rear (including myself). Hopefully a real lawyer can comment soon.
But still talking to a lawyer would be best I think.
If you can't afford that maybe the eff (eff.org) could help you.
All the best, martin
Was looking at the patent and your website, and it doesn't appear as if you might infringe on the final claim:
20. The system of claim 19, wherein the computer is integrated into at least one of an audio system, a video system, and a message board of a sporting event to trigger content elements at times of sporting event milestones based on the production schedule.
Clearly that haven't patented rundown software - that has existed forever. Their invention seems to be to use rundown software to drive multiple screens in a sporting arena.
That said, you need a lawyer.
Hopefully it would be easier/cheaper than a protracted head to head lawyer battle.
Prior arts for this patent: http://goo.gl/YRP2U
In my experience, most lawyers are sloppy. You can make their life difficult— Unlisted number, separate Google Analytics accounts, PO Box, private registration, call forwarding, redirect their corporate subnet to Google, etc. It should keep them busy enough to at least mess up the paperwork, they always do.
Go here: http://www.probono.net/
Find your state and see if you can find a pro bono attorney or two. Give them a call. See if one can refer you to someone who does pro bono patent work. Gather whatever materials you can that prove your business was created prior to the filing of the patent, and have it ready to give to a lawyer. Do not reply to their lawyer again until you speak to a lawyer yourself.