Legal Question in Intellectual Property in Massachusetts

i have received a letter from a company in my same geographic area alleging trademark infringement. here are some of the facts. he has a contracting company which he has two names for, he also has a third name that he uses to sell supplies to other contractors not to the general public. this is the name that is similar to mine that he is alleging infringement on. He does not use this name on his trucks, website, fliers, business cards,adverting stuff or anywhere else that is visible to consumers i in fact cannot find it anywhere associated with his business. also his other two names i believe to be heavily branded as his company image along with his vanity number. the first two names are every where his business is.the only place he seams to use this other name is on forms when he sells to other contractors. i use this similar name as the major image of my company. he also has this similar name incorporated. there is no copyright or trademark on our similar names. we both do the exact same kind of contracting for residential and commercial customers. they are also demanding that i transfer my domain name to them. i also have emails to him back in 2008 on a different subject but my listed name then is the one that is in question. i have a lot invested in my name at this point. so i guess im looking for some feed back on the situation and what i should do. thanks ahead of time guys.

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