I don't disagree. It's not cheap to sue someone. But it's also costing him a lot of lost business to have this guy out there badmouthing his company. So if it were happening to me, I'd consider the money spent on lawsuit and attorney, money well spent. In the end, you would get the other guy to stop for good, very likely.
On the other hand, it's highly unlikely it would ever go to court. My business attorney told me when we started this process with the ex-employee that the likelihood of this actually going to court was really low. He had done dozens of cases like mine over the years and he said he had never, yet, had to go to court. The other party had always eventually relented once they realized they were on the wrong side of the law. Which is exactly what happened in my case. I was a little worried it might cost me a few grand to put him in his place. And I wasn't happy at that prospect, but I was willing to do it, because he was specifically targeting MY clients - and I'm sorry but I'm not going to stand by and let that happen. No matter what it cost me, I was going to win this. Fortunately, it only cost me a few hundred and we got everything we wanted.
As for hardscaping, I guess it depends on your business, your marketing, and your area. For us, it's a huge part of our business these days. Made over $1Mil. in hardscape jobs this year. Or jobs that were mostly hardscape with some landscaping too. So if I had someone targeting me on that, in this way, I'd definitely go after them. I wouldn't just say, "Whatever, that's how business goes. Life's rough" and let him get away with it. But maybe that's just me. I'm nice 95% of the time. But when I need to be, I'll be a total bulldog!