We have been teaching our kids (2 of whom have been the target of mean kids) that "hurting people, hurt people". It's something John Maxwell says. It doesn't make what the bully does okay, but it helps them to understand that it is not thier own fault, but that for whatever reason, the bully is hurting on the inside, and that this makes them want to hurt others.
I hope that he is able to be strong and stand up to this bully (it's hard to "fight back" when only words are being used). I have been trying to instill in my daughter that she doesn't need to be around these "friends" of hers. Man, can girls ever be MEAN to each other!!! (and she's only 5)