Hello It is ilegal. The first thing you can do is politely contact them and ask them to change their design -drop a hint that if they don't do it you'll take further actions. If they don't remove it, you can try contacting their hosting company (you can find out who their are making a "who is" search: networksolutions.com/whois/index.jsp Some hosts will honor such request providing that you can demonstrate that the template was stolen from you and not the other way around. The last step would be contacting a lawyer and sue them. Of course only big companies do this, since you need really big pockets. Good luck.
Place an HTML comment at the top of your page with a copyright notice letting people know that your HTML and/or template is unique and is protected by international copyright laws. Will this deter all thieves? Probably not. But if you add the comment then you've done your part. As always, IMO.