That said, this sounds insane to me. Why would you spend money going to war with a competitor over such a trivial matter? ("OXO copied a patent that we also copied. Help, help, I'm being repressed.") Only to lose in the end? I don't get it.
One other observation: excellent application of Betteridge's Law of Headlines.
I think the Quirky people genuinely thought they were ripped off. They wanted to be seen as the small company of inventors being ripped of by a much larger company. Unfortunately, they lacked enough introspection to realize they have done worse, and now they look like hypocrites.
(All I can think of are Microsoft's attack ads against Google, or Apple's "Redmond, Start your Photocopiers" ad. Wouldn't that money be better-invested in improving the product?)
Absolutely, because it puts the attacker on the same stage as the much larger company. It is risky, so it is a tactic that should be limited to companies that have less to lose.
Look up the history of Salesforce.com, and you will see all sorts of attack tactics that were instrumental in their success: attacking oracle, staging fake protests outside enterprise software conferences, etc.