Are you sure they hold a full 800K or 720K? The PC standard was 720K formatted.
Twiggy drives were brilliant conceptually, but poorly executed. Doubt there would have been a lawsuit, as "Twiggy" was merely their nickname. Their official name was FileWare to be released as UniFile and DuoFile for the Apple ///, but failed so miserably on the Lisa that they went away quickly. Had they worked, they would have been a boon in 1983 supporting 871K on a 5.25" drive well ahead of the industry standard.
As has been pointed out, the 3.5" floppy had already been incorporated in PCs, but failed to take off in the PC world, until Apple adopted them making them a standard. Also pointed out, the PC/AT introduced 1.2MB HD 5.25 drives in 1984, but they were incompatible with the existing DD disks, and IBM was plagued with compatibility problems, particularly accidental corruption of data and damaging disks (the AT also suffered from a high number of defective hard drives). Perhaps that was the death knell of the 5.25" drive? I wouldn't know however since I only ever used 400K & 800K 3.5" rigid disks on the Macintosh which were always highly reliable for me. As for recovering the "good" technology from a failed product, well that's generally the basis of all business models, and the reason we have the Macintosh and ProDos and GS/OS, among other innovations by Apple which outlived their prototypes and commercial failures.