Might have been mentioned before, so I apologize if it was, but this reminds me of the Nissan.com battle. Nissan is the family name of the owner if a small computer repair service that has been battling Nissan motor company for rights to the domain and name in a battle going back 14 years. The details are at Nissan.com if you are interested.
I'm not a lawyer, and would hate to be in the position of either party. I do not see a clear right and wrong here, though many do. I guess it's for the courts to decide now, but its a shame it came to this.