I am sorry I can not help but want to say Welcome to Cute. Hopefully someone will come along and help. In my mind it is a copyright infringement.

Welcome to cute.
I think there may be different laws regarding copyright in different countries. From what you are saying here though you need to contact etsy as soon as you can to inform them. If you have your concerns in writing via email it can only help your case. A lawyer in your area specialising in copyright laws would be the next best person to contact.

Good luck and I hope you can get it resolved quickly without too much cost to you in lost income, fees etc

I would contact Etsy, give the date she bought them, a copy of your email to the buyer and her reply. Plus the proof you have that you digitized these designs. And ask them to handle it.
Have you any identifying mark in the design. I use my initials in the underlay when possible.

just show etsy proof of your sell....

I think that you have already had some sound advice here. It is a disgrace that so much of this theft of a persons hard work and costs goes on around the various websites and in many cases without the website owner doing a great deal to stop it. EBay is a classic example where people are purchasing an original copy of a design disc and then copying the files and even the title images for ongoing sales. I don't know a great deal about the likes of Etsy and similar stores but would have thought that they would wish to uphold their 'good name' were you able to provide them with a clear and well-presented case. Furthermore, I don't know which country you are from but here in the UK we have a legal system which provides for a 'Small Claims Court' whereby any individual can sue another for up to £5,000.00 on payment of a small court fee. This system avoids the need of engaging expensive lawyers. It may be worth looking into whether you have such a system available in your country.
May I wish you every success in your endeavours to take this person down!

Wow that is so not fair. I hope you can put a stop to this sooner than later...how cheeky of this person..
Are you allowed to say who this is so no one on Cute at least will not buy from that site...just a suggestion, but I know this could be a tricky issue.

Sorry can't help you with the legal side of things, but definitely state your case with Etsy and see what they can do. On a lighter note Welcome to our little part of they world. Marian/ Sydney Australia

Sorry but I cannot help this is so wrong

I'm so sorry to read this Knock3x - issues like this are really very annoying. I hope that ETSY can help you without you having to be too competent in "legalese" so to speak. You at least can prove that the designs are yours and with all of your documentation I hope you can overcome this. By the way, welcome to Cute from me, Chris, Newcastle, Australia.

First of all, welcome to the cute family. I am so sorry that this has happened, some good advice below for you. I wish you luck and hope that you get a good outcome with your problem. Sorry that i have no extra advice or help to offer you at present. Sandra, Sydney Australia.

Thank you everyone for your suggestions and words of encouragement. I live in the United States. Etsy's process for opening a case is terrible. I must have gave the seller a scare because she took down my designs. I am going to keep an eye on her shop.

happy 2 hear she took your designs down..
Definitely keep viewing her shop in case she does it again.