[jmyeet]

You might want to consider registering a trademark on that name if at all possible. Even if you can't register the 5 letter name itself, register something else like "iname widget". it should bolster your defence if it ever came to it.

[throwaway29495]

I wouldn't do that. A trademark might be lost due to that company being the first one to trade under that name, and part of that might be the court forcing the person owning the domain to transfer the domain name. If there's no trademark and there's no business at that domain there's no way to sue for trademark infringement.

I would keep it as far away from anything business-like as possible.

[jmyeet]

It's complicated.

It is worth noting that for a trademark to be enforceable it has to be in use, at least in the US. So if you're not going to use it in any way, then yeah it has no value.

But if you are going to use that trademark then it can give you an awful lot of protection. Note that defense of a trademark is usually around if there is potential for confusion. Say the trademark is the name of a medicine and your trademark includes that name but you sell luggage, the phamaceutical company doesn't really have a claim against you because they don't operate in that area and there's no potential confusion. If you want to sell first aid kits however that might be a problem.

Without a trademark, you may still face a company who does have a trademark.