A trademark battle in the Arduino community

Looks that way, that's the essence of a trademark dispute, Arduino LLC owns the trademark for what is called an Arduino. Smart Products SRL might have close ties to Arduino LLC and the hardware openness allows them to sell under their own name if they wish but they aren't Arduino LLC and they shouldn't pretend that they are by squatting on related domains and changing their name to be confusingly similar.

It's really not any different than if Sony contracted with some East Asian manufacturing house to make TVs or something and the contract factory tried to change their name to Sony and sell new devices as if they were Sony.