Is the AdWords Competitor-bidding Party Over?

1-800-Contacts is trying to force a legal ruling that could put a chill on the widespread practice of PPC advertisers bidding on competitors' trademarks.

According to this article in MediaPost:

IN THE LATEST EXAMPLE OF a marketer suing about search ads, 1-800-Contacts this week filed a lawsuit in federal court against LensWorld for purchasing search links triggered by the term "1-800-contacts." The company, which has brought several other similar cases, says it's trying to guard against confusion. "The worry that they have is that these advertising methods will make consumers think there's an affiliation between these other companies and our client," said 1-800-Contacts' lawyer, Bryan G. Pratt.

Many advertisers experience great conversion results bidding on competitor terms, so the impact on the search advertising community as a whole could be huge.