Hi, I run quite a few Ad Words Campaigns and Ad Groups covering a vast range of services for one of my sites. As you would expect, competitors Ads come up because they provide similar services. But some times the ad text on these competitors ads (one competitor in particular) don't really seem to have much to do with the search term at all. When I check their landing pages, the same holds true. Then, even stranger, when I Google my company name "My Company" the competitor ad also appears just below mine! One of the words in the company name is quite generic and also related to the services provided, but even so? The competitor must be paying a lot per click, (mine is about 6c and quality great) or playing tricks some how? Are there dodgy things that competitors can do in this way?
If your company name isn't trademarked, there's nothing to stop competitors having it in their keyword list. And yes, they may have just decided that it's worth paying a lot per click to be shown, either because it works out in terms of return, or they do just have the money to throw at it.
About such issues, google has already lawsuit with some company and their customs in US. But I don't know the lawsuit result. You can check the news on the internet.
If your name is trademarked you should contact the company in question and ask them to remove your trademarked name from their campaign. If they do not reply after a reasonable amount of time, then there is a form to submit to Google, a trademark complaint form if I recall. This is actually a good tactic. I won't give specifics of my experience, but one of the companies I manage provides a complimentary, but not the same, service to CompanyOne. (no space between words on purpose) We bidded on the keywords "company one" (with a space). Their trademark covers only the term without a space. They asked us to remove the keyword but we did not reply and if they were to complain to Google they have no case as their trademark does not cover "company one" with a space. We do get cheap leads from the keyword so well worth pursuing. We also pay through our teeth per click due to QS being low, but a higher conversion rate compensates and overall the cost per conversion is lower than the campaign average.
In my experience, you can bid on the trademarked keyword, you just can't use this trademark name in your ads. That's been the case with me and competitors.
If they have a trademark complaint you cannot mention them in the advertisement. I know some large companies do not allow anyone bidding on there name when it pops up so maybe that is part of it as well or they may just pay google a fee to keep it this way.