You need to assess the merits of their claim. You also need to think about the costs and likely outcome of any dispute resolution procedure or court case.
Faced with the threat of legal action by a large, well-funded company, smaller businesses often decide that their best course is simply to concede a disputed domain name and to negotiate appropriate settlement terms. On the other hand, if you have invested significantly in building your Internet presence, this may not be a satisfactory outcome - and you may have a strong case for defending a claim.
