A few days ago, Mike Berkens reported on the UDRP decision for 7Days.com, a decision that went in favor of the complainant. The owner of the domain name did not file a response to the UDRP, so he couldn’t present his case for ownership. I think not responding to a UDRP is bad for a couple of reasons (unless you are advised by a legal professional that not responding would be in your best interest).
First, you don’t have an opportunity to defend your ownership of the domain name. You’re letting the complainant make its case and aren’t able to rebut its complaint. If the submitted evidence is enough for a panelist to make a decision in favor of the complainant, you could lose the case pretty easily.
The second reason may be less obvious but could pose a future threat to your business. Not even considering that a UDRP loss can be used by a future complainant to show bad faith on other domain names, it could also show others that you are a sitting duck. A non-response could encourage other companies to file UDRP cases for other names you own, believing you may not defend your rights to own other domain names, possibly making their chance better.
Whether you decide to hire a lawyer or not is your decision to make based on the strength of your case, value of your domain names, and/or financial situation, but I don’t think not responding is for the best (unless under the advice of an attorney, which I’ve heard about). If you don’t care enough about your domain name to defend it, perhaps you can just give the name to the company to get them to withdraw the UDRP.