MamaDawg - 10:53 am on Jul 1, 2011 (gmt 0)
If you registered a domain of a really famous mark that would be different. But who the hell ever heard of
That's why we have tm's - so you can defend your brand without having to be "really famous."
Things not in your favor: The imagery/name is very unique (what does the first word have to do with that product?), the other company's mark pre-dates yours, and you're in the same class of goods and services.
Putting a disclaimer on the site after you received the letter will do you no good.
In my opinion, they have a strong argument, but I'm not a lawyer (and even if I was, offering legal advice in this forum is a no-no.) If you're serious about fighting this, I strongly suggest you consult a good IP lawyer.