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There are several other such domains around, usually presenting some fun tricks with and around Google. I suspect that Google will only step in if such a site either is a competitor, or hinders their own business in some other way. Of course, you'd have to ask them directly about this to be really sure...
There are companies that try to use their trademark protection to suppress free speech and parody, but google doesn't seem to be one of them.
And of course, I agree with the other writers - google is well aware of these domains.
If the defendant wins the arbitration, they can probably get Google declared to be a "reverse domain name hijacker" by the arbitrator. Even short of this, the publicity of Google going after this particular domain would surely be enjoyed by this site.
In U.S. law, as well as in the domain name arbitration process, it is recognized that the infringing mark has to be "confusingly similar," and also has to be used in commerce. In the arbitration process, it also matters whether the infringer acquired the domain under bad faith, such as having it parked with the intention of making a profit from resale.
This "watch" site has an iron-clad case. Their domain is not all that similar, being a dot-org instead of a dot-com, for one thing. Furthermore, a legally-recognized, tax-exempt nonprofit owns the mark, one which has a long history of trenchant social criticism. Finally, the mark is being used by this nonprofit in good faith for purposes of criticizing Google.
We have this thing called the "First Amendment" in the U.S., you see.