No doubt that they did think of that. Instead they decided on intimidation as an opening strategy.
> ... as I was using the name 7+ years before them with a similar product
So they are guilty of what they are accusing you of. You could: 1) threaten to counter sue and settle for a price, or 2) sell them your .com
They've no doubt anticipated these responses as well and are prepared to negotiate. They simply decided to open the negotiations at $0
