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Some well publicized examples of these types of domain names disputes are: candyland.com: Both Hasbro and an adult entertainment provider desired the candyland.com domain name. Hasbro was too late to register the name itself, but it is never too late to sue (well, almost never).
Dear [Infringer's Name]: We have recently discovered that your business is using the mark [mark/domain] for your service or product. We believe your use infringes on our ownership of the [registered trademark/domain] mark. We learned of your use of the same or similar [mark/domain] mark on [date].
Such letters are usually written by attorneys and are often sent to stop alleged or actual infringement of intellectual property rights, such as copyrights, trademarks, and patents. A cease-and-desist letter may also be used to warn the wrongdoer against harassment, slander, libel, as well as contractual violations.
You can serve it via mail, email, an attorney and, in some cases, in person. However you choose to serve the letter, keep a record of delivery and receipt by the offending party. If you are sending the cease-and-desist letter yourself, send it via certified mail so that you have a record of delivery.
File a trademark infringement lawsuit. If you take the domain name registrant to court and win, the court will order the domain name registrant to transfer the domain name to you. The court might also award you money damages as well.
A domain name cease and desist letter is usually written by an attorney, although sometimes it's written by the trademark owner. The letter is not a court order, so it isn't legally enforceable. The letter contains your opinion, while notifying the offender that they're intruding upon your trademark.
In relation to this general concept, domain name trademark infringement thus occurs when a person or entity acquires and/or uses a domain name that is otherwise protected by a trademark.