How does my patent protect my invention?

It would depend upon the claims in your patent and the evidence of use that can be shown to meet each and every claim element in at least one claim in your patent.

Assuming you have grounds for infringement, infringement litigation can be a lengthy and costly process.

Have you considered approaching that company with a licensing agreement, wherein they pay you a licensing fee to use your invention? You may overall come out financially better off with a licensing agreement to your patent, especially if your patent could be circumvented. As Patrick noted, infringement must utilize each and every element of at least one claim -- if the other company can apply the process overall but with modifications that go around the elements of the claims in your patent, they can get around your patent without infringing. This is a very common way to avoid infringing a patent. A key question in deciding to file a patent is its licensing value -- licensing is the primary way to derive revenue from a patent (other than products sold using the invention). The greater the potential to circumvent the elements of the claims, the lower the licensing (and overall) value of the patent.

Your competitor may not understand that aspect, so you may have some leverage in how high you set your licensing fee, unless the patent is very difficult to circumvent.

But you should carefully weigh the costs -- and risks of failure or time value of money lost during litigation -- against a licensing agreement that provides you fair return on that patent, immediately. Of course, the potential of litigation may give you leverage in licensing discussions, but hopefully you wouldn't have to back that up with an infringement suit.