Here's a loophole that dishonest AdWords users can use to beat the competition. This quote is from the Google Australia & New Zealand AdWords Team.
Why am I publishing it here? As I can't get Google to fix this loophole, maybe someone else out there can:
"Thank you for your email. I understand you wish to know whether it is possible for any company to run an ad on behalf of someone else using their company name which is not trademarked.
Yes. If the company name is not trademarked and a complaint has not been filed with us we cannot disallow an advertiser to run such ads."