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Is a Domain Name an Automatic Trademark?

"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?"