drongo - 6:15 am on Feb 9, 2011 (gmt 0)
Anyone can threaten to take you to court. It's as easy as typing out this message. However, very few cases actually end up in court. She is trying to frighten you and make you think she has a legal case, when in fact it is highly debatable at best.
So I would do what kaled advises. Acknowledge the threat, but make no comments one way or the other.
In fact a quite likely outcome is that when she realises the weakness of her case, she will instead make an offer to buy the names from you. Then you can agree, adding a premium for the stress she put you under.