No, it is allowed. You just can't put a trademarked term in your ad copy. You can even get away with putting the trademark in your ad copy unless the brand told Google to enforce their trademark.
There are tricks to get around this as well that sometimes work. (i.e. Dynamic Keyword Insertion)
There are tricks to get around this as well that sometimes work. (i.e. Dynamic Keyword Insertion)
edit: Source: https://support.google.com/adwordspolicy/answer/6118?hl=en