Hi Lisa,
If you are asking about Google AdWords campaign then you can use competitors brand as keyword but you can't use in Ad copy but if you are asking about SEO then Google does NOT police this. So in the SEO sense you can use that and you won't be penalize.
What would be the benefit because a great effort required to rank competitors keyword and if your sites getting visits from those searches most probably bounce rate would be very high I have seen this in Adwords campaign by using competitors keywords?
Hope this helps.
Thanks