Do I fight the subpoena?Probably not. Most people want to fight the subpoena based on a visceral reaction to the invasion of their privacy. But the legal standard for defeating a subpoena is very high, and it would be expensive to fight it. My guess is it would be more expensive to fight the subpoena than just letting the process play out. Understand that at this stage, the only thing that is happening is your ISP is giving your name to the entity who claims that you infringed. This is not an admission of guilt.
That said, if you really just want to fight the subpoena, and you believe you have good grounds for doing so (e.g., you didn't even have an account with that ISP at the relevant time), then what you need to file is called a "motion to quash" the subpoena. You shouldn't take on this task without at least some advice from an attorney.
Do I mail in the letter they ask for?Sometimes your ISP will block your service and notify you in the letter that you can respond with your own letter admitting several things in order to have your service re-established. Usually, you are asked to say things like (1) you have deleted the downloaded work from your computer, (2) you didn't know what you did constituted copyright infringement, (3) you promise you won't do it again, and/or (4) you consent to jurisdiction somewhere, like your hometown or where the suit was filed. You have to understand that if you send in this notice, it will do almost nothing for you. I will explain more in another post, but the only entity that benefits from you sending in that letter is your ISP, not you. Unlike above, this notice would be an admission of guilt and would seriously compromise your rights.
Do I fight the suit?Whether you choose to fight the suit depends on how certain you are that you did not do what you are accused of doing. If you are completely certain you did nothing wrong, then you may want to fight the suit. There are several grounds upon which these suits can be defeated. For example, if you can prove that you were on vacation when the alleged download happened, and there was no one at your house, then you would more probably be able to defeat their case. There are other reasons you could win too, like your ISP was wrong about what I.P. address your house was using at the time. These things change all the time, and maybe they got their records wrong. Or maybe the person who first identified your I.P. address got it wrong. Maybe some numbers got transposed. Maybe your wi-fi network was not secured and someone else was surreptitiously using your Internet service without your knowledge. Who knows? The point is, if you are certain you did not do what you are accused of doing, consider fighting it.
What if I win, so what?The good news is "what's good for the goose, is good for the gander." If you are at the point where you have been personally accused of infringement, then undoubtedly you were informed that the rights-owner can also seek an award of attorneys fees against you. These can easily be in the low hundreds of thousands of dollars. But they would have to win first. If you win, guess what? Yes, you get that same award of attorneys fees against them for bringing the case. They didn't tell you that, did they?
But again, whether you choose to fight the case should turn on how certain you are that you can prove it wasn't you who downloaded or uploaded the copyrighted work. If you are certain it wasn't you, and you can prove it, then you should consider fighting the case. If you can find a contingent fee lawyer (like us) who will take the case, then you could potentially turn a bad thing into a good thing.