You can find the full details over on John Schember's blog. It's technically complicated and quite long so I'll just cover the basics here.
John is one of the contributors to calibre (he's also now the maintainer for Sigil, the epub editor). Like most open source developers, John contributed code under a GPL license and kept the copyright.
I wanted to make that point clear because it's important to note that when Hamstersoft ripped off calibre, they didn't just steal code from a single developer. They pirated code written by a dozen or more people, all of whom have good reason to now sue Hamstersoft.
John kept the copyright on his code, and he contributed that code under a GPL v3 license. Pretty much anybody can use his contributions - just so long as they comply with certain conditions. Hamstersoft neglected to follow a key condition of the GPL. Specifically, they are required to release the source code for Hamstersoft Ebook Converter. Thus, they don't have any license to use the code.
John contacted Hamstersoft shortly after the Hamstersoft Ebook Converter launched (when he noticed that it used code from calibre). Hamstersoft apologized for the error, and they promised to comply with the license requirements. They didn't.
It's been a month since John contacted Hamstersoft, and that's all the time he's willing to give them to correct their error. Right now he's going around to all the hosting sites and filing DMCA notices. It's a work in progress.