As a relatively small business with no clout we've had to deal with fly-by-night operations violating our trademark with Google ads (basically randoms running ads that look like they are from US when people search our web domain) and Google not doing anything because we didn't register the trademark. Of course Google won't do anything—it'd hurt their bottom line!
As I understand it, if you didn't register the trademark then it's not your trademark legally except as a defense against lawsuits. So Google seems to have followed the law. Better than them becoming some sort of extra-legal arbitrator of quasi-trademarks.
This is exactly the mentality I was talking about in my first comment.
You think it's better than Google only follows the letter of the law, and destroy it's search credibility, than put some process in place to prevent deceptive advertising.
Searching for one thing, seeing something different at the top of the page feels pretty deceptive to me. If it didn't work, they probably wouldn't do it.
