That said, this hinges on a few factors
1) Legitimate use. Are you using the domain yourself, irrespective of the TM holder? (you are not, and its a bit late to fix as he's already seen the domain, which states it is for sale)
2) Are you deliberately 'confusing the market'. (you are not, as you are not using the domain- this generally goes down to trading on someone elses brand)
3) First use. You were there first, but only after the name was mooted. It's 50/50.
Contact a lawyer, he will tell you where you stand. Try to avoid connecting real-world you to this post as it definately gives the impression you acquired the name soley to trade on it, which would be bad.
You may wish to reply and ask what he's offering in any case- it might be cheaper for him to pay you than pay a lawyer (unless its Apple, MS, Disney, Coke and anyone else who employs an army of lawyers to protect trademarks)
TRADEMARKS AND LEGAL ADVICE:
- Posting domain name details is a violation of the Charter of this forum, yet, such details are what competent legal counsel would insist on knowing before offering advice.
- There are hundreds of jurisdictions, each with their own variation of intellectual property and trademark law.
- Statements made in public forums can and will be used against their maker.
- Trademark holders can search domain forums for threads triggered by their communications. Declaring "I was just contacted by a lawyer about a domain . . " can signal "This thread was started by the person you just called." See #3.
- Money judgments for cybersquatting, trademark violations and other intellectual property wrongs can bankrupt people and companies.
- Threads that involve personal legal or trademark issues inevitably lead to the same conclusion: "We are neither qualified nor sufficiently informed to offer competent legal advice. Talk to a lawyer".
For these and other good reasons, from this point forward [webmasterworld.com], the Domain Forum will no longer host threads related to any individual's or any company's domain trademark issues. The only place to seek opinions concerning specific legal matters, such as the ability of any party to assert trademark rights or defend against such a claim, is a law office in the proper jurisdiction.
Generalized discussions about legal issues not specific to a member's circumstances, discussions about finding or using authoritative government sources (USPTO.gov, Patent.gov.uk, WIPO, etc.), or discussions concerning significant WIPO, ICANN or court decision are proper material for discussion.
If someone posts a legal issue thread, wherein they state that they have been contacted by legal counsel for "the other side" the only advice that should be given is to strongly encourage the person to stop posting details in public forums and to immediately seek a private consultation with a lawyer.
Those who ignore the warnings do so at their own peril. I seldom see the value of the advice, other than "talk to a lawyer", as worth the peril of making statements that may come back to haunt their maker. Publishing such details is a bit like putting a bullseye on your forehead.
[edited by: Webwork at 2:48 pm (utc) on Nov. 4, 2008]