"I registered a descriptive domain name (something like "thesimpledog.com") and started a blog on it. About a month later I get a threatening letter from a link farmer who owns "simpledog.com" The owner of simpledog.com is claiming that he owns the trademark to the words simpledog even though he has no real business or rights by that name other than a static page with some text and Adsense slapped on it. There is no product, service or brand whatsoever. Does simply registering a two or three word domain give you instant trademark rights to those words even though you've never done anything with them? Should I give up my domain to a link farmer who is trying to bully me, or does he have a valid right to any phrase he registers that isn't already trademarked?"
I say it has a lot to do with relevance and connection to a business model. One of the reasons Cisco didn't have as much clout over the iPhone trademark was because they hadn't developed a product with the name iPhone. (They ended up rushing a product out the door when they found out for certain an iPhone was going to be released).
Generic terms often get scrutinized in trademark cases. SimpleDog is a very borderline combining of terms.
A domain name is also a matter of parody and/or satire.
After all we have PAYPALSUCKS.COM and WALMARTSUCKS.COM