If they are actively trying to protect their trademark, its best to comply with their wishes and not put yourself in a position to be sued.
Did Google suspend your customers keyword? If so it may be possible to use it within a phrase as I did.
No - Google didn't mind so far, but the competitor sent an "Abmahnung" (special stuff in Germany). Abmahnung means: You have x days to declare that you will stop what I don't like. If you don't I'll sue you. If you declare, but continue anyway, you owe me ****xx $
In many cases this is used by questionable persons who want to extract money out of people who e.g. have a wrong comma in their "inpressum" - but it can a well be used by a competitor who feels his rights are "hurt".
Thanks for all your answers, I really appreciate your comments.
Google's position is that they don't allow advertising on trademarked names. So don't do it.
However.....am I supposed to know that all my keywords are trademarked? Of course not. So I go ahead and advertise on competitors keywords, blissful in my ignorance. If a trademark owner pops up and complains to Google then you'll have to stop advertising on that keyword. But not until then.
If I'm reading correctly, are you saying that we _can_ put brands in keywords, but _not_ in the Ad Title and Google will allow that?
For example, would keywords "abc widgets" be accepted with an ad title of "Widgets for sale" without the "ABC" name in the title?
AWA, any clarification on this?
Basically, when a trademark owner has 'complained' it is handled on a case by case basis - per the specific requests of that trademark owner.
So it may be ads and keywords - or just keywords - or just ads.
Also, I'd suggest following the link that eWhisper provided way up there in post #2. This will take you to the actual policy. (Thanks eWhisper.) There is also a link there to the trademark complaint procedure.
AWA