What are the legal issues involved with the scenario below and how should those issues should be resolved.

Websites R'Us, Inc. is in the business of creating and hosting websites for various personal and commercial purposes. They are incorporated in the state of Delaware however their principal office for conducting business is located in Denver, Colorado. The company also has an office in Miami, Florida, and, they often will fly multi-million dollar clients to their Miami office for meetings regarding the creation of the client's website, although all work regarding the building of the site is done in Denver.

One of its biggest clients, is in the business of selling adult literature and movies online. The business name is Disney World Productions, Inc., out of Louisville, Kentucky,and they own the rights to the web name, DisneyWorld.com. Disney World uses as its logo, a blue background with a castle and a little fairy flying over it in the nude. Websites R'Us is aware of the similarity between the Walt Disney World name and it's client's name and in fact also has Walt Disney World as a client.

One day, little Johnny Walker, who is only 7, was surfing the net trying to get onto Disney World's website and accidently came across the website for DisnyWorld.com. He is on the website for about 20 minutes when his mother notices that he's being awfully quiet and goes into the game room where the computer is located to see her son viewing inappropriate adult material. She is outraged and immediately emails Walt Disney World to advise them of her disappointment in their company.Seeing the email from Mrs. Walker, Walt Disney World sends cease and desist letters to Disny World Productions and to Websites R'Us . Both parties ignore the letters and the website continues to be available through Websites R'Us. Walt Disney World's headquarters are in Orlando, Florida, where of course, Walt Disney would prefer to file suit.