Good PPC managers know that bidding on the branded terms of their competitors can be highly effective.  What keywords you can and can’t bid on or use in ad text has always been kind of murky to advertisers.  Usually it’s left up to the automated Adwords system to disapprove a text ad if it has a trademarked term that gets flagged.

Google Adwords has changed their policy over the years, mostly due to legal complaints and in effort to improve relevancy in search results. Google loosened this system to allow advertisers to use brand names in their ads as long as they are “resellers, sellers of component, replacement or compatible parts corresponding to the trademark and informational sites”.

Official Adwords Blog:

For example, under our old policy, a site that sells several brands of athletic shoes may not have been able to highlight the actual brands that they sell in their ad text. However, under our new policy, that advertiser can create specific ads for each of the brands that they sell. We believe that this change will help both our users and advertisers by reducing the number of overly generic ads that appear across our networks in the U.S.

If you feel that an advertiser has violated this policy and is using your trademarked terms against your will, you can notify Google via this Adwords trademark submission form.