JOHN ANTON'S TROUBLES began with a phone call. It was March 2006, and the caller, it turned out, had the wrong person: He was looking for the software developer who was selling websites just like the one on which Anton ran his custom T-shirt business. “I told him I built the site myself, and it wasn't for sale,” Anton recalls. "They told me that I'd better go Google this company in India called Infogate, because they were selling website templates that looked just like mine."

A few mouse clicks later, Anton was staring at a knockoff of his company's website on his computer screen. Not only had a hacker apparently stolen the code that allowed customers to create Custom T-shirts online, the thief also had lifted all of Anton’s proprietary graphics and images, along with the photos of his models-who included Anton and his 9-year-old daughter. Things only got worse when, after a few more searches, he found half a dozen other sites that also looked nearly identical to his. As panic set in, he wondered what to do.

Anton, the founder and president of Anton Sport in Tempe, Arizona, which sells customized clothing like shirts, sweatshirts, and ball caps, had spent about $500,000 developing his website, DesignAShirt.com, back in 2002. At the time of its launch, it was one of the first sites to give customers drag-and-drop tools to custom-order shirts or ball caps with a logo for, say, their company's softball team. By the end of his third year selling online, sales hit $6 million, with customers from all over the globe. Now, unbelievably, this hacker was selling Anton's intellectual property for a flat fee of $1,200. “I felt sick to my stomach every time I clicked on another site and saw my own double chin," Anton says.

Anton placed a call to David Rauch, his lawyer, and then began a more thorough investigation into Infogate and its customers. He trolled through apparel industry forums and turned up a lot of negative feedback on someone named Kumar Sudhir, apparently the hacker behind Infogate. One disgruntled customer had even created a website called Infogatesucks.com to collect complaints about the company's faulty products and support.

Anton continued to be baffled, however, by how this hacker got his code. Though he knew it was all too common for someone to copy a website's look and feel, he couldn't imagine how a hacker had tunneled into his server to get at the supposedly secure code and images. He trusted his IT team when it told him that his site used the latest and greatest security tools. Growing more frustrated by the minute, Anton fired off a terse e-mail to Infogate's tech support center, the only contact information he could find, letting Sudhir know he was coming after him. “I demand that you cease and desist from selling this-application immediately, or we will have no other choice but to involve our legal team,” he wrote.

Meanwhile, lawyers had mixed news. Though Anton could certainly threaten Infogate with litigation for a clear violation of international copyright law, it probably wouldn't be worth the cost and effort. Not only would it be extremely expensive and time consuming to pursue a trial in India, but it was unlikely Anton could expect an Indian court to enforce any restitution.

The good news, though, was that Anton could go after any knockoff sites based in the United States that were using code purchased from Infogate. Eager to make an example of someone, even if it wasn't Sudhir, Anton enlisted his attorneys to begin tracking down the principals at two websites, Groovyprints.com and Ad-A-Print.com. In the summer of 2006, the lawyers served cease-and-desist letters to the operators of both sites, informing them that complaints of copyright infringement and unfair competition had been filed in Arizona federal court. Both parties, Anton says, were taken by surprise: They apparently had no clue they had bought stolen property, and they both quickly settled. Shutting down Groovyprints, in particular, was cathartic for Anton. “I actually got to hit the Delete button and watch as all of my stolen files got emptied into the trash,” he says.

By now, Anton had spent about $12,000 in legal fees and received only $3,800 in the settlements. He had no regrets, but he remained exasperated that Infogate continued selling his code to any taker. He desperately wanted some way to hit back at Sudhir directly. Indeed, Anton was continuing to field calls from would-be competitors who wanted to buy a site like his. After hanging up with one such caller, something clicked: Maybe he could start selling his software in addition to T-shirts. Instead of threatening to sue everyone who had a copycat website, he could just offer access to his own. “I thought, I'll beat Kumar at his own game," Anton says.

Anton, however, didn't know much about the software business. Moving forward would mean hiring some tech savvy and likely expensive Web developers. It also meant investing thousands of dollars in security software and hardware which, he worried, might just be throwing good money after bad. But after doing some more research, he recognized an opportunity. Besides Infogate, there were no major competitors. Maybe, he thought, he could strike back at Infogate and introduce a killer app to help his business grow even faster. Still, he knew he would be venturing into unknown territory. And some friends advised him against it. "You're a T-shirt guy, not a software guy,” one fellow CEO warned. "Grow where you are planted."

The Decision: In January 2007, Anton debuted his new business, ShirtSoftware.com, at an industry trade show in Long Beach, California. As the event opened, Anton was anxious. And he got off to a slow start. Attendees seemed confused about what he was selling. After all, every other vendor was hawking some kind of screen-printing product or piece of apparel. Anton, it seemed, was going to have to create his own buzz. With microphone in hand, he herded onlookers toward his computer display, where he demonstrated the power of his software.

After gelling over their initial skepticism, people started listening closely. ShirtSoftware, Anton explained, would help traditional screen printers take their businesses online almost immediately. New customers needed only a username and password; after that, their online storefront would be up and running through servers operated by ShirtSoftware, which also promised to take care of any hardware or security issues. Customers would be responsible for printing and shipping shirts themselves.

The software is free for customers that place five orders or fewer a month. Pricing for a larger operation begins at $60 a month, with one-time setup fees ranging from $1,000 to $5,000. Anton say's he has 350 users, about half of which are using it for free. By May, however, he hopes to have 500 paying customers, which would amount to some $3.5 million in new, high-margin revenue.

Anton has had to transform his business, adding half a dozen IT professionals to his staff of 27, investing in more powerful servers, and perhaps most important, making a big investment in redoing the website's architecture by adding cutting-edge security tools. He is also spending a lot of time on the road to get the word out about the new venture.

Though ShirtSoftware has a long way to go to match the $6 million DesignAShirt pulls in, it has given Anton another potential revenue stream-and a way to fight Infogate. That outfit, however, remains a tough rival. Anton has yet to receive any replies to his repeated calls and e-mails, and his code remains for sale on Infogate website. The good news is that Anton hasn't found any new copycats recently. That may be because he is active on the industry blogs, spreading the word that Infogate is running a fraudulent business. "I just want to make it clear to anyone who buys my code from Kumar that it will cost them,” Anton says. “I will find them and take them out of business.” -Darrell Dahl