You seem to imply that if the situation was reversed, if someone had ripped off Microsoft's code and when caught they stopped the service and apologized, Microsoft wouldn't sue them up the wazoo. How realistic do you think is such statement?
And yes, it probably is in Plurk's best interest to either seek settlement or sue Microsoft over this - for one it will show that they wont tolerate being ripped off (otherwise what's stopping someone else doing it again tomorrow and when caught "sincerely" apologizing) and for two, for a small and relatively unknown company it makes perfect financial sense to do so, they will probably make more money this way than they'll be able to make in 10 years "building software".
And yes, it probably is in Plurk's best interest to either seek settlement or sue Microsoft over this - for one it will show that they wont tolerate being ripped off (otherwise what's stopping someone else doing it again tomorrow and when caught "sincerely" apologizing) and for two, for a small and relatively unknown company it makes perfect financial sense to do so, they will probably make more money this way than they'll be able to make in 10 years "building software".