he very well can and he very well can win that claim based on a use that has not been registered which if registered would enhance his case.
...and here we come to what really matters in DG's situation, in which this guy's use of "TM" is pretty much an irrelevant tangent.
What really matters, whether or not the guy has rights in the term, is that he approached you to "purchase" a domain name.
Most of the time, if you read what the inquirer wrote - very carefully and very literally - you will find that you have not received a "purchase" inquiry.
You will usually have received an inquiry along the lines of "I noticed you have example.com. I would like to know how to acquire it" or some other vague sentiment which carefully avoids using words like "buy" or "purchase". Atlernatively, the note will say, "I noticed you have example.com. Is it for sale? And how much?" Again, that is also not a purchase inquiry.
In both instances, the person is saying, "Will you give me the domain name, or will you instead try to sell it to me so that I can use your response as evidence you are a cybersquatter."
I don't buy, at face value, anyone's claim that they received a "purchase inquiry".
Now, having done some basic research, let's go down through the risk matrix and find any obvious facts that would result in "if he tries a UDRP, he'll fail anyway".
First up - chronology. This is the easy one. How long do you suppose he has been using the term at issue as a mark? That might be online or offline. Look up his corporate registration data and see how long the company has existed.
OUT #1 - if you registered the domain name prior to his commencement of use of the claimed mark, then he should not win a UDRP.
Second up - distinctiveness, inherent or otherwise, of the claimed mark. You say he uses it as an acronym. Well, SCUBA is an acronym for self-contained underwater breathing apparatus, and it's not a distinctive mark for that purpose. Distinguishing between an acronym of a trade name, and a trade mark, is not a subject that I can go into in any great depth here. Needless to say, you might review the UDRP decisions in sjpl.com, wbw.com, and bag.com to pick up on that distinctions to be made there.
Next up - your use. I like the way you said that you registered it
because it is a geographic term. I don't care if you registered it because it is your auntie's nickname. What matters, is how have you been
using the domain name. If the domain name is EssoGas, because you are enthralled with some Italian alpine village populated by five people and named EssoGas, but if the domain name is coming up with PPC links to petroleum products, then nobody is going to give a hoot that you registered it "because" it is a geographic term in your mind.
But.... whether or not the guy uses "TM" is not at all relevant to anything you need to consider as a practical matter.
Are you referring to common law (I hope that's what it's referred to) trademark?
Yes, it's something of a long story, but because a guy in Pennsylvania was hit by a train owned by a company in New York back in the 1930's, trademark rights arise in the US by operation of state common law. We do have a federal registration system for trademarks, but the underlying acquisition of rights operates by common law.