[...] They cannot drop the name either, if we're being sensible.
They can abandon the trademark effort, if they're being sensible.
I think a better compromise would be if Mozilla allowed free software projects to be exempt from this trademark mess.
By not enforcing their trademarks as harshly previously,
Sadly, this can't be done, since they could loose the trademark in that case. It is either the "my way or the high way" here.
But I think that the compromise I suggest would allow the Mozilla Foundation to keep their trademark, but I'm not a laywer, and my trademark law knowledge is slim.
Cheers.