Patents are a tricky business...
The separator is now fair game. Water filtration is fair game. Just because the Ritello has a similar body style does not mean Rexair will launch a lawsuit. Despite all the water filtration separator based vacuums on the market, most people have never heard of any but Rainbow. A lawsuit will only increase awareness of all seven or eight Rainbow competitors, and if the Ritello is substantially less expensive, it will increase Ritello's share at the expense of Rainbow's. The plaintiff has no control over the publicity the defendant gives to a lawsuit. Hoover executed a brilliant maneuver as the defendant by publicizing a lawsuit against them. Not 100% sure, but I believe it was Western Electric who sued Hoover. Hoover exploited the lawsuit to garner public sympathy and increase awareness of their product and its uniqueness. Hoover's patent on a rotating brush as up in 1925, and they scored an engineering coup with the invention of the beater bar. Air-Way copied it (sort of) and was successfully sued by Hoover, where after Airway concentrated on tank-type cleaners. If I were Ritello's legal team, I would be prepared to turn a lawsuit into a triumph.
Rexair has only themselves to blame for the proliferation of their competition. Upon closer examination, disgruntled and mistreated RGD's have been involved in the development of several of their competition.