A report over at SearchEngineWatch gives us the final “U.S. District Court ruling” word that you may use trademarks for paid search ads, but you cannot use the actual names in the ad text/copy that consumers will see.

Another note in the ruling is that it’s ok to insert trademarks in your meta tags, which in my opinion is a useless gesture in any case if you have good quality content. Again you can’t use trademarks in a place where consumers or visitors will see on your site either without proper permission.

Example: Pretend for a minute that Microsoft is the purchasing advertiser -
Using keyword: Apple

Google Ad (Bad):
keyword: Apple
Apple iPod vs Zune
Buy Zune instead of Apple iPod
At Microsoft.com
www.microsoft.com/zune

Google Ad (Good):
keyword: Apple
Microsoft Zune
Buy Zune MP3 Player
at Microsoft.com
www.microsoft.com/zune

So take a good look at your competition and what keywords you could use to incorporate in your own paid search accounts. Feel free to mix and match terms that you think will work, just be careful not to use the {Keyword:brand} dynamic feature with those trademarks!