In terms of cost/benefit, a cease & desist letter is your first best bet. They may not be aware of the problem. Making it appear that you're serious (name of a law firm, trademark no., what exactly they're doing wrong spelled out, snail mail a copy) will improve your odds.

In terms of what you have to stand on, your attorney will tell you. Put that C&D letter out and maybe you won't need to involve an attorney.