Client of mine that i don't do PPC for was contacted by someone in the same industry threatening legal action because, if you typed in the accuser's company name then my clients ad came up.

My client doesn't use competitor names as any of his keywords, so, is Google showing your ad when someone types in the name of another company who has some product or service overlap with yours ?

Maybe on a broad match but can't stop anybody bidding on competitors keywords, maybe from showing keyword in the ad but not an ad itself.

Yes, Google's broad match does sometimes use competitor names as keywords.

To prevent this, add the competitor's name as a negative keyword. Also block predictable misspellings of the competitor's name.

I recommend doing that by creating a shared list of negative keywords to apply across multiple campaigns.

In my experience, clicks on competitor names are not strong converters (YMMV), so you likely wouldn't be giving up much and you'd save some headaches.

>but can't stop anybody bidding on competitors keywords

Right, only if they're trademarked. Can't use them in the ad text though.

Thanks all, very helpful.