if you have time, stick a site up with some relevant content and if you are worried sit on it for X months while adding some backlinks.
If you can get some traffic on it and a
PR it will be more attractive to the owners of the genericgeneric as a 301 redirect or as a standallone lead-generating minisite.
Not too familiar with the legal position but if it aint a trademark, cant see what they would be whining about and easier to just cough up some cash for it if they think it is worthwhile.
Someone over here owns a similar site to one of mine with an S on the end.
For some unkown reason his crappy site is still up their with mine in the SERPS - most annoying and I have thought about making him an offer. I wouldnt even think about it though if he wasnt on the first page of google for the same search terms as me.