Your disclaimer, as it is currently worded, sounds like a bad idea. You are giving surfers a call to action, which is to check out your competitor's site.

Maybe you can get a cheap laywer to approach your competitor with a legalese letter with the air of, "You are going to have to put a disclaimer on every page of your site that states you are not affiliated with Rustic Windows and Doe Contstruction if you want to continue using the domain name." If they are spending money to hijack your name, they are not going to want to advertise you to the customers that came to the site to find them, and they might just give up. You won't get the domain, but at least they'll stop using it.

Or along those lines... sometimes a threat is as good as a judgement.

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