Hi
First off, please go back into your post and replace any identifying details with a fictitious but parallel set of facts.* (Anytime you're faced with potential litigation, you want to keep identifying details out of the public arena.)
The question here, as you suspect, is whether the words you are using are generic or descriptive. If the former, they are unable to serve as a trademark. If it's the latter, the guy complaining may still have an uphill battle. Trademarks are not supposed to be used to monopolize generic terms. You can't use the term "table" as a trademark for a table. Other people who make tables need to be able to use the word "table" in connection with selling tables and the law won't let you monopolize it. Similar, though not identical, situation with descriptive terms. While it is possible to use a descriptive term as a trademark, since other people may be able to use other ways to describe the same kind of goods, such terms need to be used long enough to be recognized by the consuming public as being a brand name before they can be considered to be trademarks. They are extremely weak and can be hard to enforce.
The terms at issue certainly seem like they could be generic, if they are the usual terms used to identify the real item that functions as the one you're selling virtually, but that's just the first impression of an outsider unfamiliar with either the real or virtual goods -- not a legal opinion (see disclaimer below).
And of course, even if you would be totally in the clear with respect to infringement, that doesn't mean this competitor can't make life very difficult for you. There are some good TM attorneys on this list serve who may be able to help you out with a carefully worded response to these folks without breaking the bank. (I'm a former TM attorney, but not currently set up for IP practice.)
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*Do copy and save what you've set out, however, since you may want to share that in a private PM, if you decide to contact one of the other attorneys here.