I think a moderately competent lawyer would be able to build a case. Of course, it would get tied up in court for a while, but protecting IP is a big part of IP law (more on trademark I think, but IANAL). The C&D should have been sent a long time ago. It’s possible that this is a department that’s “moving fast and breaking things” and higher-ups said no to the license. In no way should that be considered to excuse the behaviour.