Competitor keeps clicking my ads

One of my competitors keeps clicking my Adwords ads every day. It's not much (5-10 clicks per day) but I bid quite high so it sums up quite a lot at the end of the month. When I check my stats and Adwords stats I see that Google doesn't filter all repeated clicks from the same IP. For 5 clicks from the same person (same IP+user agent, all clicks within minutes) I have to pay for about 4 clicks.

Why doesn't Google allow me to disable ads for a certain IP? That would solve my problem.

Any free software you can recommend for collecting stats from this IP and then sueing the guy?

I haven't used it yet, but I've heard that ClickDefense is good for these kind of things.. Kind of pricey, but they've got a 14-day trial that should allow you to get the info you need.

I use a web based program call ConversionRuler.com. Their goal isn't to track click fraud but if you download the information log, you can write your own scripts to separate clicks by IP and date. I had a really high click from one IP but realized that it was an AOL IP shared by many AOL users...