You are doing nothing in contravention of google policy. Let them take this to court. They won't, because they're not fighting you they're fighting google.
Send them a copy of this;
https://adwords.google.com/support/b...92877&hl=en_GB
Tell them that if google rule that you are in contravention you will consider their argument.
Teletext I think are pursuing it against competitors. If they do this will be the test case. It's going to take one of the big companies to take this on. Us lot are just small fry!