Then the domain owners needs a new lawyer...
Aspirin used to be a TM, but was diluted to a point where it is generic. It is a product and the TM is unenforcable because of the dilution. That is a case of a TM l;osing its uniqueness...
As far as generic names.....
Windows is generic... yet TMed
Champion is genereic.. yet TMed
Cheer is generic... yet TMed
Apple is generic... yet TMed (twice)
I could go on for pages with this....
As far how it is used is very important (but I will point out you orinially stated the domain would be in the same catagory as the TM holder in post
#5)
a true genereic name can be TMed in different catagories, search "Apple" in this section and you will see many posts on it.