[mseebach]

I think it's worth calling out and appreciating the fact that they are approaching you in a calm and reasonable manner instead of through a huffing and puffing lawyer nastygram.

It reads a lot to me like they are willing to negotiate a mutually beneficial agreement. Go meet them face to face (if practical, I think you're both in London?) and bring a list of the key features of your owl, logo and name and how it differs from theirs and see if you can give them some guarantees to keep yours different enough from theirs to avoid confusion going forward.