Your small business benefits from having its own property, ideas and ideals. You don't have many, but the patents you do have support your business and your intention to grow it in the future.
It is not hard to imagine your shock at finding that your product was being manufactured by another major organization just months after the initial release. When you sent them a cease-and-desist letter explaining the problem, they claimed they'd never seen your product and that they didn't violate your rights.
What should you do?
The simple reality is that patent holders have the right to protect their property. It doesn't matter if another person stole it from you directly or came up with a device on their own; if it infringes on your patent, they shouldn't be selling it.
The infringing party may argue that your patent isn't valid, like if it includes fraudulent information about the date you created an item, but that doesn't necessarily hold much weight without evidence. In most cases, the patent holds strong and protects you against others using your property.
In your situation, you can file a lawsuit within six years of the infringement. You've found out early, so it's good news for your case. You can take time to collect evidence and to build a strong case with your attorney before going before a judge. In the end, the other party is costing you money and affecting your business, which is not something you can stand for.
Our site has information about infringement and what to do if your patent is infringed upon.