Seeing that you have to pay for the alerts (from googlealert.com) if you want more than three checked, I'm sure Google will eventually do something about it seeing that you can get free google alerts from Google themself.
The website was registred on March 11, 2003 so it seems that they were there first. I also remember within the past few weeks hearing Google suing Froogles.com (I think thats the url) and they lost. The little guy won becuase he registered the domain name before Froogle was started. I'm not sure of the exact details, but this seems a lot simliar with the whole alert thing.
Should be interesting I say.