"Obviously, nobody likes it when you give their customers other options. But it's not trademark infringement."
Of course it's trademark infringement. A company is paying Google $$$ to have their company associated with a phrase that's legally registered to another company.
Google allows anyone to outbid a trademark owner to the point where the trademark owner doesn't show up at all. Now, instead of FirePond paying to have their ad on Google, they have to outbid all their competitors, just to enforce their legally recognized trademark.
Imagine if other ad mediums worked this way. Don't want a competitor using your trademark in their magazine ad? Fine. Pay the magazine $$$ more then the competitor. Great for the magazine. Bad for companies and consumers alike, since the company's are going to pass along that cost to the consumer.
I can understand why the plaintiffs are pissed.