domain names and trademark infringements

I own a couple of domains that contain a trademarked product name, e.g.

buy-trademarkedproduct.co.uk, and
buy-trademarkedproduct-online.co.uk

The company that owns the trademark has just contacted me, and said that it
infringes on their trademark and I should hand over the domains to them or
they will start legal action.

Clearly these are not domain names they intend to use, they just want to
stop me using them - the question is, can they?

What are my options here?


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