The problem is it's a grey legal area that has not been litigated yet, or at least not that I have seen.

He's working the keyword strength of pages that rank well and using links to the original site, so he gets the benefit of the search result for that site and it's keywords, without trademark infringement.

He is not blatantly buying your trademark in adword buys but taking a different approach.

It's a pretty devious approach, albeit very well thought out and strategically it does work.

I don't think you are going to get ISP's or SE's, or much interest in punishing him until search engines themselves rule against it...which does not seem to be happening at this time.