Well, Harmonix didn't create the genre (and neither did Konami), they just made it not suck (not something Konami ever came close to accomplishing). Also, I actually read the legal mumbo jumbo, and the issue is not with the fact that it's a rhythm game, but that the guitar and drum peripherals violated patents for Guitar Freaks and Drummania. Which if that's the case why wasn't Guitar Hero sued (GHIII mentions the patents so Konami must have contacted Activision, but then why no action on GHI-II-over priced expansion? Or for that matter why didn't they simply contact Harmonix and say 'hey you're violating our patents but if you license them we won't sue' like they probably did with Activision? Anyway, back on topic) Or Donkey Konga? It still seems fishy, especially since Konami is also launching a product that would be in direct competition with Rock Band if it weren't banned. Though worst that'll happen is Rock Band gets pulled and Rock Band 2 costs more because they have to license from Konami. Most likely they'll either win the case or settle and license the tech until the patent wears off. I think Magnavox still holds the patent on game consoles, meaning the big 3 have to pay them some royalties for every console sold, so it could be that Konami just does that. I don't know. We'll just have to see, and set fire to Konami headquarters if they succeed in banning Rock Band so their inevitably JPop coated knock-off can go unchallenged.
EDIT: I wikipediaed Konami's game, apparently the song list is pretty good, though they have some lame pop in it, and all the really good songs are already in Rock Band.