I own example.net and I received an email threatening legal action because their customers are getting confused since my domain (example.net) ranks higher than theirs (example.com) for the term "example" in Google. Both of us offer similar service and they're already an established brand; for me, it's just more than a side project. However, they don't own any trademark for that term - "example" ("example" is a generic term people would use for searching such kind of service).
What should I do in this case ? Any help would be very appreciated.