Name-brand keywords are some of the best performing you can find. In competitive markets, searching for trademarked terms usually reveals a dogfight, with the rightful owner at the top of the pile. Although bidding on competitors’ trademarked terms will often lead to poor quality scores (and thus a large bid surcharge), those low quality scores can be offset by the high conversion rate of these ready-to-buy visitors.
This situation is common because Google’s US trademark policy only applies to trademarks in ad copy; it doesn’t prohibit bidding on trademarked terms. While Burger King wouldn’t appreciate a McDonald’s representative standing outside their establishment holding the sign “Come to McDonald’s Instead”, there’s no trademark law against this, trespassing notwithstanding.
What companies can’t do is misrepresent themselves. It would be a trademark violation for McDonald’s to put a Burger King sign outside their own establishment. Are competitors using your trademarked terms in their ads? Google can help you – but you must take the initiative.
If you are a trademark owner interested in claiming your trademark and/or authorizing a third party to use your trademarked terms, fill out the AdWords Authorization Request form.
If you believe someone is currently infringing on your trademark in their ads, Google will perform a limited investigation. To get the process started, file a Google Trademark Complaint form. Note that Google only investigates trademark use in ad text (not keywords) within the United States. The investigation typically takes 6-8 weeks.
Keep in mind that Google does not monitor the use of trademarks in the display URL, so advertisers are potentially allowed, for example, to use the display URL www.shoeshop.com/Nike even if they are not an authorized reseller. (There are some exceptions to this rule such as being an authorized reseller or an informational website. See Google’s policy on resellers and informational sites.)