Someone Stole My Scrambled Paragraphs!

Dear Rich: I spent several weeks preparing a free, non-commercial educational blog for middle school students in NY City with many "scrambled paragraphs." What I did was to take an original paragraph from a web page and I then scrambled it to turn it into an educational tool (often altering the text to make the paragraphs work). I also cited the source for each paragraph. The blog helps students practice 'scrambled paragraphs' for the SHSAT test. There was no free resource of such materials online so I created one. I estimate it took tens and tens of hours, altogether. Inexplicably, and out of the blue, last week a guy wrote to me and said, basically, to paraphrase: "My daughter has benefitted from your paragraphs, so I decided to take all of them from your site and create my own website using them. My site is better." Most of the paragraphs that are on his site are mine. He later seems to have thrown other paragraphs (of dubious quality) on his site. So basically, this site will hurt kids more than help them. His argument is that *I* have stolen the paragraphs and he now has the right to steal them. I felt my use constituted fair usage because 1) I am not making a penny from this, 2) The authors are not losing a penny (I am actively promoting their sites), and 3) I 'transformed' the original material into something socially useful. Can you please give me feedback? This is an unfortunate situation and one for which we don't see any reasonable resolution. In the dream world in which we sometimes live (and envision world peace and an end to global warming), we wish that the two of you could have collaborated using his programming skills and your talent for scrambling and both shared the rewards. But that's not going to happen so here is the scorecard.
Thin copyright. We knows it's aggravating to see your work pilfered but unfortunately, a court is likely to determine that you have a compilation copyright (a thin copyright) in the order of the sentences, not the content. And even though it took a lot of work, copyright doesn't protect what's called "sweat of the brow." So your copyright claim is not strong, and your adversary's attorney would make the most of it. Attributing the paragraphs doesn't help your claim to copyright ownership and neither does the fact that you're not profiting and it's for educational purposes (though that might help you in a fair use defense in the unlikely event any of your sources chase you). The end result of your hypothetical court case is that lawyers would do well while their clients went broke. We sense that your adversary knows you won't sue and is brazenly ripping you off because ... well, because that's what people do these days (maybe he should watch this).
What can you do? If you're looking for a stronger basis to bring someone into court, you could consider making people join your site before using it. As part of "joining," they must click to agree to your user agreement which should state that no portion of the site may be copied. A breach of this agreement would prove easier to enforce, (should you choose to go to court) than the wishy-washy law of copyright.