The use of a trademarked brand name in your ad tex t: for instance, if you are selling sporting or tennis shoes, you can’t say “Better Shoes Than Nike.” That’s an illegal use of their trademarks and will get reported fast. Google then restricts your ads, removes them or can result in even worse penalties.
The use of trademarked brand names in your display URLs : in the display path URL, you can’t use a trademarked brand name. For instance, your URL can’t say “www.site.com/better-than-nike-shoes”
Google reserves the right to remove anyuse of trademarks on your ads in Google following a complaint. Here’s what Google says:
If a trademark owner submits a complaint to Google about the use of their trademark in AdWords ads, we will review it and may enforce certain restrictions on use of the trademark. The following policies apply to trademarks used in text ads on the Search Network…however, Google may remove specific ads on the Google Network in response to trademark owner complaints.”
But there are certain exceptions to the rules when it comes to trademarks.
For instance, are you an authorized advertiser? If the owner of the trademark has given you the authorization to use it, you are free to use the trademark.
Are you a reseller? For example, are you a dealer that sells branded items? If so, you can advertise using those trademarks in your ad texts.
Lastly, if you are an information-based site , like Consumer Reports or CNet, you can use trademarked names.
Be sure to follow these rules before getting into competitor targeting to ensure you avoid penalties or legal issues.