badbadmonkey - 4:10 am on Aug 10, 2011 (gmt 0)
If you mean another NZ competitor, you'd be best forgetting about Google, and filing another suit in NZ against the advertiser. Google do not, and I mean do not, give a two-penny shag about your IP or legal rights; they actively work to corrode the rights of webmasters, copyright holders, trademark owners, et al, and they will do their utmost to avoid setting any precedent against their own favor - and they most certainly would actively despise any suggestion that they should pay heed to NZ law as opposed to the Californian or Irish jurisdiction they would hope to select for themselves.
A hint of the arrogance Google display, mixed in with their disdain for the law and IP law in particular, is their implication that you should have "trademarked" the term in question, as if actually registering the TM is at all necessary. 1) An established trademark, assuming it can be demonstrated as in fact being a trademark, has the same weight of law behind it, registered or not, and 2) using your trademark (assuming a brand name or something) in a domain name would be its own infringement; the fact that there's www in front and .co.nz after is completely beside the point.
So forget Google's "policies", they do not set NZ law: go talk to an IP lawyer, and see if it's their opinion that using your domain in that manner constitutes trademark infringement. Given the precedent you apparently have I'm sure they will be happy to give you a free consultation.