It wouldn't get to trial. Cease and desist letter with the threat of legal action would likely do the trick, as charmbracelet likely have insufficient funds to defend themselves, and it simply wouldn't be worth the money to defend a small project name. At the very least it would be easy to force them to remove any use of VHS in relation to video tapes: they have a giant picture of a VHS video tape on their homepage!

If the trademark owner discovers this, they would be legally obliged to defend their trademark if they want to keep it.

JVC/Kenwood has previously successfully defended their mark when used in artworks/apparel (which are not in the same domains).