Very slick!
Does it automatically start OCRing every image, or does it wait for a user to try to select the image text?
Asking because I'm concerned about this decreasing performance.
500 Startups Demo Day is hardly invite only - I attended once and had the option to buy a ticket to attend demo days. The slides are publicly available anyways. Unless they were impersonating you when talking to investors this is irrelevant.
Buying Adwords on things related to 500 is definitely aggressive, but well within the lines of fair play. If this is actually hurting your startup then both companies need to reconsider the size of the market they are in.