All's fair in love in war, however, there are some things you just don't do in the world of online advertising. Such as use a trademark keyword within the text of an ad. One online community service provider, Mzinga is doing just that, advertising both on the keyword within Google Adwords, and including the trademark name of a competitor, Communispace, in the body of the ad.
Communispace can easily lodge a complaint with Google Adwords on their Trademark complaints page in Google Adwords. However, the rules for using trademark keywords on the backend are tougher to enforce. As you see from the graphic, several other companies are obviously advertising on the Trademark keyword Communispace, the competitor’s ads are appearing on the search term. How would those companies like it if Communispace advertised on their brand trademark names? Not very much I would suspect.
Honest competition is one thing, bending the rules to suit a company’s purposes another. A better approach would be to write a blog article that includes links and the brand trademarks of your competitors on your blog post. As a competitor in the industry it is quite legitimate to write about competitors and achieving a high organic ranking will get you more results without paying for an ad, or covered by the marketing morality police.