We've had a similar problem in the last few weeks, we had a problem with a competitor and our adword clicks thru rate for those competing products went from around 10% to over 40% and sales never changed.
This went on solidly for 2 weeks and we informed Google, who responded with a standard email explaining that they had systems in place to deal with it. They suggested that if we were still convinced of click fraud we would have to supply them with all sorts of data in order for them to carry out any kind of investigation.
Luckily our competitor either got bored or decided to play fair as everything has returned to normal, but I am neither convinced nor confident of Google's ability to stop this kind of practice.
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