Legal Question in Intellectual Property in California

Re: Derivitive works, is it or isn't it.

I would say "probably not," as a copyright is supposed to protect the author/artist/creator's right to an original work by them, once it is preserved in a fixed medium. One cannot copyright or trademark words or expressions that are part of the basic English language that anyone might have an occasion to use in connection with being an English speaker. Now, I can't promise you with a lot of certainty based on a brief paragraph of facts from your point of view and no research, but what you've said so far points in the direction of an empty threat.

I'd be a bit cautious at this stage, but perhaps the appropriate thing to do is to challenge the copright claim with a responsive letter stating that you are more than willing to abide by any bone fide copyright, but (a) you doubt that the material in question can be copyrighted in the first place, and (b) if it were, you doubt that your material, which is freshly created and not derivative, infringes.

There's a pretty good chance this alone will cause the claimant to buzz off. If it doesn't, you really need to retain a copyright attorney to intercede on your behalf.