Idea stolen from proposal. What are my options? Here is what happened:


I suggested collaborating with some group and sent them a proposal for a grant application (in 2011) - and I had not seen the proposed idea anywhere before then.
they were not interested in the project.
now I figure out that 3 years later they published a paper with an extremely similar design.


Besides going nuclear (e.g., sending a letter to the editor claiming an authorship issue), what are my options assuming that I don't need to work with them anymore and that there is no way they affect my reputation?
What country are you in? You may well have legal recourse.

Disputing the validity of their patent as suggested by others may or may not be possible, depending on documentation, publication and technical similarities. It's highly technical and will certainly need legal help.

But it might not just be intellectual property rights either - 

For example, you may well be deemed to have an implicit or explicit contract with them - if you sent in a paper, it is implied that they will do or not do certain things with it. It certainly wasn't a gift to them without any restrictions as a reasonable recipient would have understood. Do not underestimate the power of claiming implicit terms (conditions that would reasonably have been understood, such as that they would return and not use your ideas if they didn't like them). Contract is based on balance of probabilities, so that helps.

There's also what lawyers call "tort", roughly meaning wrongful behaviour ("someone isn't legally allowed to wrong someone else that way"). Taking ideas without credit, harm to your ability to develop the ideas yourself or gain prestige from them, and so on, may be covered.

Finally consider what they may say - go softly. Don't threaten anything you can't do. Speak to a lawyer to find what they say is your best approach h, and consider what you feel a third party will say, if their reply is that its nothing to do with your work.