Just read this post on Slashdot:
“I registered a descriptive domain name (something like "thesimpledog.com”) and started a blog on it. About a month later I get a threatening letter from a link farmer who owns “simpledog.com” The owner of simpledog.com is claiming that he owns the trademark to the words simpledog even though he has no real business or rights by that name other than a static page with some text and Adsense slapped on it. There is no product, service or brand whatsoever. Does simply registering a two or three word domain give you instant trademark rights to those words even though you’ve never done anything with them? Should I give up my domain to a link farmer who is trying to bully me, or does he have a valid right to any phrase he registers that isn’t already trademarked?"
My opinion - tell him where to go. I thought the idea of a trademark was that you had to actively be using that name in a trade? He has no brand, no real business using that name (you can’t claim a static page full of AdSense links is a real business), and no product. He doesn’t have any sort of case, he’s just trying to bully the guy into give over his domain name… I hate stuff like this, when I was looking for a new domain name, every decent name I thought of was home to some troll like this. :(