Google AdWords Trademark Restrictions
In May Google AdWords lifted the restrictions to bid on your competitors' trademarks.What this means is that you can legitimately use AdWords to buy your competitors' company name, product names, and trademarks with a view to siphoning off their traffic.
The strategy is to recommend alternatives to their products, and acquire new visitors to your website.
And it could be a great way to get well qualified visitors to your website. Self-selected visitors, giving buying signals, in marketing terms this might be called "low hanging fruit."
For example, AsdaFinance are busily buying the keyword "Egg", our lovely Derby based online bank and credit card company:

Little companies are piggy-backing on big company reputations, with what appears to be a small Gloucestershire conservatory company cleverly buying up the Wimpey brand:

I am also aware of some tit-for-tat bidding going on, where you will find that the MoneySuperMarket website is bidding on the phrase "confused.com", and confused.com is bidding for the phrase "moneysupermarket."
Google AdWords, of course, is laughing all the way to the bank.
Keep in mind that you are NOT entitled to use the trademark in the ad text itself, and that Google will require the advertiser to remove the trademarked term and prevent them from using it in the future. They will not investigate advertisers using the trademark in the keyword list.
What if you are on the other end of the stick, with competitors buying your branded keywords?
There are a number of different strategies if you want to protect your brand against AdWords raiders. One would be to crowd out the competition by utilising multiple AdWords accounts, multiple websites, and creating multiple ads, like MBNA are currently doing. The risk, of course, is that your ads are competing against yourself, and visitors like me might click on everyone of your ads, and burning your budget.

Alternatively, you can give affiliates free reign to buy your trademarked terms, letting them pay the advertising costs and again dominating the advertising space.

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