You will know about a federal suit if a copy of the complaint is served on you.
Meanwhile, you need to deal with the office action. Frankly, this is not a matter for do it yourself. It is unlikely despite your intelligence you have the experience to construct an argument to successfully change the examiner’s mind on likely confusion. If not, you will not get the registration, not now, and not later because of "res judicata." Better get a lawyer, even if only to evaluate whether it is worth battling.
Licensed in Maryland with offices in Maryland and Oregon. Information here is general, does not create a lawyer-client relationship, and is not a substitute for consulting with an experienced attorney on the specifics of your situation.
Is your trademark already in use or did you file a 1(b) "intent to use" application? If you are not yet using the mark, the other party can have no federal claim against you since any infringement claim has to be against actual use. They can, however, file an opposition to your application if you overcome the office action and the application is published for opposition. Perhaps this is the "lawsuit" you were threatened with. An opposition proceeding is conducted much like a trial, the main difference is that in an opposition, nobody appears in court before a judge - it is all done on paper. If you are served with a lawsuit or notice of an opposition proceeding, it might be possible for you to request a suspension to your application until the court case or opposition is decided. You would still have to answer any parts of the office action not related to the pending case, such as a request to disclaim part of the mark. The trademark waters appear to be getting rather deep. You really need to sit down with a trademark attorney and go over all the facts.
YOU should not do any of those things, only an attorney should.
There is a likelihood that you suffer from confusion about the likelihood and meaning of likelihood of confusion. And if you find that confusing, then your actual confusion means there is a strong likelihood of confusion on your part if you try to answer the likelihood of confusion allegation by the Examining Attorney, who is not the other party's attorney, but rather the Government's and thus, by statute and regulation, the public's attorney, and assert that there is a likelihood the Examining Attorney is confused about likelihood of confusion between the marks and attempt to demonstrate that there is no likelihood of confusion. A trademark attorney will find that amusing not confusing.
YOU should only and need only hire a trademark attorney to review this matter and advice whether you should (a) drop this mark or (b) stand and fight. And, further if you fight, do you fight (a) the refusal to register by trying to convince the Examining Attorney that there is no likelihood of confusion or (b) any pending lawsuit from the other person's attorney, or (c) both. It is not really clear to me that there is any such pending lawsuit. A refusal to register on the grounds of likelihood of confusion does not mean there is a lawsuit by the other person's Attorney. In fact, you say you don't know, which tells me there probably is not. If there was, you would have been served with papers and know it and you would have likely received a Cease & Desist Letter from the other party, which you don't mention having received. The Examining Attorney is NOT the other person's attorney, but rather a Government official and it seems likely you are confused about that.
Since you are likely confused about likelihood of confusion you need to hire a trademark attorney to unconfuse you and to convince the Examining Attorney of the error of his or her refusal and/or objections. Absolutely not a do-it-yourself thing. If you think otherwise then listen to Jack Nicholson in A Few Good Men "You Can't Handle The Truth". Enough of my lecturing, please heed the advice and get that attorney. Good Luck Unconfusing.
I am not your lawyer and you are not my client. Free advice here is without recourse and any reliance thereupon is at your sole risk. This is done without compensation as a free public service. I am licensed in IL, MO, TX and I am a Reg. Pat. Atty. so advice in any other jurisdiction is strictly general advice and should be confirmed with an attorney licensed in that jurisdiction.
You have received great advice. You need to consult an IP attorney. Many will give you a free initial consultation.