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At the end of the day these matters all come down to how badly you really want to spend money on lawyers, tie yourself up in a court battle and burn resources fighting for a domain? If the domain isn't earning you anything, going to battle as matter of ego is foolish. However, if the domain is making you a lot of money, that also probably strengthens their case against you.
The main point is that trying to resolve matters like this on GFY (or any other message-board) is just about the worst thing you could do. Speak to a lawyer and speak to homegrown.. but do it privately and professionally.
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