edit: in the comments, Bruce rightly points out that the lawsuit is not about the ability to import an EndNote library, but actually about the ability to import EndNote's .ens styles into the .csl citation style language used by Zotero. I can see where this might be grounds for a potental lawsuit, since the .ens format is a proprietary one owned and designed by Thomson Reuters. however, the format that the .ens style describes is certainly not the proprietary. moreover, allowing your software to open file formats of competitors is pretty standard practices. consider OpenOffice, which happily opens, edits, and saves to MS Office's .doc format. it sounds to me like Thomson Reuters is using this as an excuse to sue GMU for making what is arguably a far superior product (and doing it open source, no less).
which brings me to the claim that "GMU reverse engineered Reuters' EndNote software to create Zotero." I find quite hard to believe. Zotero functions so much more smoothly and effectively than EndNote ever did, I highly doubt that reverse engineering EndNote was the basis for Zotero. I really don't think Thomson Reuters stands a chance at winning the lawsuit if it goes to court.
however, my fear is that it may not go to court. I'm not certain whether or not GMU would see it in their best interest to spend the legal fees necessary to take the battle to court. it's entirely possible that they may simple remove the EndNote import feature (or even worse, take the site down entirely). I'm not sure how this has panned out in similar open source cases (e.g., MS Windows v. Linux/Unix). law suits like this really make me wonder if the current scheme of intellectual property law in the US actually fosters innovation. or does it instead just fosters bullying and enables large corporations, backed by lots of money and lawyers, to edge out any smaller competition, even if the competition is superior?
update: those who are interested can find more commentary on this issue and more discussion of the legality of a .ens to .csl converter (thanks to Bruce for helping point me to these).