The system is a mess. I have a small side project and I trademarked the name, yet a competitor of mine used my trademark to promote their site and after speaking with several people about my situation they made it clear that unless I was willing to put up about six figures to fight it there isn't much I could do.
None of those people you spoke to sound like lawyers. It won't cost six figures to have a lawyer send a letter. Your competitor might not like the six figures prospect of defending themselves.
Actually they were business people who have been through this battle before spending in the six figures to defend their marks (along with my brother who is a patent attorney). But yes, you are correct that sending a letter is the first step but if that step is ignored then the next step will cost money...and too much money for a single developers side project!
