Could Derrick Dodge order Don Wheaton GM to not advertise on the same page of the newspaper? No. Does MacDonalds build where there is no competition? No. Competition makes the market work.

If your use of a keyword offends another competitor, it should be Google that gets the C&D, not you. Let them deal with it. As wige writes, they will be policing for unauthorized use of protected terms. If your terms are not raising any flags, and are landing your ads on the desired SERPs, it seems the wheels of competition are turning freely.

I might be a little less harsh with the accusatory language though. That could land you in trouble.