You have a choice here, to respond immediately, or to sit, watch and wait.
(1) The examiner very probably sees a likelihood of consumer confusion between your chosen mark and the prior filed mark application pursuant to Lanham Act Section 2(d) -- if so, the letter should actually state this somewhere. Representative language taken from similar letters reads:
"If the mark in the referenced application(s) registers, applicant’s mark may be refused registration under Section 2(d) because of a likelihood of confusion with that registered mark(s). ... Therefore, action on this application is suspended until the earlier-filed referenced application(s) is either registered or abandoned[.]" [citations omitted]
The suspension letter should also give you the express option of either waiting or responding immediately. Again, representative wording will typically say something like the following:
"No response to this notice is necessary; however, if applicant wants to respond, applicant should use the “Response to Suspension Inquiry or Letter of Suspension” form online at http://teasroa.uspto.gov/rsi/rsi."
If If you so choose, you can immediately have a trademark attorney prepare and file a response to the suspension letter, in an attempt to convince the examiner that there is in fact no potential for consumer confusion. And if successful, the examiner will then lift the suspension and permit your application to proceed to the next stage of the process, independently of whether the prior cited application is granted or denied.
(2) However, you can instead opt to wait and see whether the prior application cited in your suspension is denied or abandoned, whether due to the opposition that has been filed against it, or for some other reason. If you choose to wait and see, this should not prejudice your application in any way.
If the prior application is thereafter denied or abandoned, this will clear the way for your suspension to be lifted, and for your application to proceed, hopefully culminating in allowance/registration. [NOTE - Of course, the same third party who filed an opposition against the prior applicant's mark might ALSO step in to oppose your own registration, for the same or similar reasons, in which case you will have to defend against these claims.]
On the other hand, if the prior application is allowed/registered, then at that point the examiner should issue an office action denying your application for registration, citing confusing similarity with the prior filed mark just granted, on which your suspension was based. You will then have the standard 6 months to respond with arguments and evidence as to why no likelihood of confusion actually exists.
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My typical advice in a situation such as yours is to follow path (2), i.e. wait and see what happens, absent some compelling reason to short-circuit the process. Responses to Section 2(d) denials (or to suspensions issues citing Section 2(d), which amount to almost the same thing) can be costly, and would be an avoidable expense should the prior filing be denied, cancelled or abandoned, etc. The one clear downside to this approach is that your application will be in limbo until the potential conflict is resolved, causing considerable delays and uncertainty in your overall branding/marketing plan, which you may or may not be able to live with until the denouement.
Note that even were the prior application to be granted, you might have obtained some "common law" trademark rights based on actual use of your mark in commerce, which would be grandfathered in and would likely permit you to continue conducting your business as it existed when the prior application was filed. However, your ability to expand, either geographically, or in terms of new markets and product/service offerings, could be circumscribed. And while admittedly better than nothing, such common law rights are generally inferior to registration on the Principal Register.
THIS POST DOES NOT CONSTITUTE LEGAL ADVICE, DOES NOT IMPLY ANY ATTORNEY-CLIENT RELATIONSHIP, AND IS PROVIDED FOR GENERAL INFORMATIONAL PURPOSES ONLY.
You should consult a TM attorney. It is possible to argue the suspension. If successful, you would also remove the prior application as a bar to registration.
The problem I think you have is that it appears no proper due diligence was done. We would have to understand the marks in question, the class of good/services they describe as well as the all the dates each claim to have begun use in commerce in order to even begin to offer insights on your application and position.
At present, while you reserve the right to respond now this will more than likely be a waste of time. The Examiner will not take action until the other mark is either registered, abandoned or rejected. You should monitor carefully because many times you will have to follow up if for example the other mark holder did not send in their statement of use and the mark went abandoned.
That said and to be clear, you should discuss this in more detail with your own TM lawyer and have a proper clearance conducted. I will link you to some general info on this below and most of us here, including myself, offer a free phone consult.
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The answers provided are exemplary and informative, but do not clearly spell out how you should "approach a response that is successful in lifting the suspension"
The answer is to select any one of the experienced attorneys here in AVVO or your network recommends, hire them to evaluate the marks in question, and IF (that's a big if) the facts are as you stated, there should be no problem lifting the suspension.
My disclaimer is simply that Avvo already has an adequate disclaimer.