To be honest I don't know much about legal stuff like that but comparing the names eternity games to eternity mod studios is a bit ridiculous considering eternity is a commonly used word in the English language and you have two other words in your name creating a difference. If I got a cease and desist letter from them I would of found out what legal ground they had to stand on. Of course it all depends also on the amount of trouble you would have to go to, to change your name. If it was like a 15 minute job then Its just easier to change it but If you have to redesigned your graphics, have previous games under that name and have a web site using the name then it would of been worth checking out.
Better to be dead, than to live your life afraid.