Ask HN: Ebay Threatens to sue me. What should I do?

I think they found me because I applied for a trademark for the name "barterbay". Nevertheless they say they will take legal actions if I don't do the following:

"* 1) expressly abandon your pending application for trademark. 
 * 2) cease use of BARTER BAY or similar names, including as a business name, trademark, trade name, domain name, on any website, and in any marketing materials; 
 * 3) cease use of the BARTERBAY.CA domain name and transfer your registration for that domain name to eBay; 
 * 4) cease use of BARTER BAY or similar names on any social media accounts and cancel all related social media accounts ; * 5) remove your mobile applications from the Google Play and iTunes stores; * 6) refrain from using or seeking to register any other name or trademark combining a generic or descriptive term with the term BAY; * 7) provide written acknowledgement of, and agreement to comply with, these demands
"

I never intended to free-ride on eBay's fame. Barter Bay is an online platform for locals to buy, sell, and most importantly barter goods and services. The idea of connecting bartering communities and our trading deck feature came to me during my last year of university, and the name was thought out together with fellow classmates. The reason we use "bay" is because our website and app uses a pirate/sailor theme, illustrating the old times when ships travel from island to island bartering goods. Our logo is a whale with a leaf-like tail symbolizing the importance of waste conscious for our environment.

My team and I spend a lot of time and money in our app. I am not sure if I should reply this email. Should I comply? =/