Legal Question in Intellectual Property in Iowa

I own an S corporation and am being sued by my previous employer / customer XYZ. They claim I am selling two of their "proprietary parts" on the open market to their customers. I purchased a 30 year vendor / supplier to XYZ and continued to supply parts to XYZ for 3-1/2 years without incident.

Facts:

I have never signed an NDA or confidentiality agreement with XYZ as an employee for 17 years or as a vendor

XYZ tried to force me - as a vendor to sign an NDA / Non Compete or they would discontinue doing business with my company - I refused - XYZ cancelled orders and stuck me with 100K in inventory

Part A, that I am accused of selling to the open market due to the fact XYZ's customers have returned similar parts claiming they are defective and these parts are claimed to be identicle to those I obtained on the open market and sold them to my then customer - XYZ - as samples. XYZ didn't like the samples I provided and advised I supply only the inner hub of these to another supplier to be molded into the final product (Part A.)

Part B, I made three of and sold to a third party for field testing to be able to prove our capabilities and quality to XYZ in the event they would decide to purchase these from me as they have done in the past. Once again, these parts ended up returned to XYZ and XYZ claims I made these and am selling them all over the world.

Claims follow:

XYZ claims I have an unfair competitive advantage since I worked there for 17 years

XYZ claims I am selling to their customers - of which I am not

XYZ claims I am using proprietary processing procedures to manufacture these parts (XYZ never made part A, does not know how to make part A and doesn't even know the process to make part A and referred me to manufacture a sub-part of Part A because they can't make the sub parts OR the entire part themselves)

XYZ claim I am and misusig trade secrets

XYZ is stating I am ruining their reputation by selling inferior parts and claiming Ithey are XYZ's parts ( I have never marked the parts as theirs, nor are they patented)

XYZ is suing me personally AND the corporation

I feel I have a solid defense as I have not and am not selling either part A or B. XYZ is requesting a temporary, immediate injunction and I do not want XYZ to succeed. If they do, it will set precedence and there are over 250 -500 other parts I am able to sell, in which they already admit I can do so as long as I do not claim they are XYZ's parts.

I have ascertained a law firm to answer the claims, and counter suue. My questions follow:

What can I sue them for?

Breach of contract? Cancelling the open orders and not paying the cancellation fee?

Onerous lawsuit?

Frivolous Lawsuit?

Defamation of character - false accusations

Restrictions of free trade?

In the meeting when XYZ wanted me to sign their NDA - they stated and reiterated that IF they were not going to do future business with me, they would buy the inventory I had on hand sinc it was made for them....

I wouls also like to get attorneys fees paid....

When I decided to purchase the vendor GTL to XYZ, I was compelled to purchase another company AG to mitigate the risk of losing a key customer, my prior employer XYZ. This has now happened and I would like to know if I could sue them for me having to buy another company to mitigate the risk - I know it's a far stretch but worth trying....

Thank you

I hear there could be a number of claims:I would like to start another company

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