In my opinion, LEGO must follow clone brands very closely, and this for a number of reasons.
The first, which is obvious and has already been mentioned, is that they want to protect their own intellectual property. As such, they'll want to take legal action as soon as possible when one of their trademarks/copyrights is infringed.
The second one is actually also about intellectual property, although not their own. Indeed, while LEGO is usually considered as the leader in the field of interlocking bricks, it can indeed happen that a competitor creates something new, which LEGO might not have considered. That would be where you would suggest that LEGO should "keep up", but in reality most of the time it's exactly the contrary: since they may not infringe on the competitor's own intellectual property, they won't be able to imitate them.
So saying that design decisions can be made independently of what other manufacturers are doing is, in my own opinion, utterly false. I can't imagine a field of business where you can completely ignore what your competitors are doing, just because you believe you're ahead of them, and if you do, you're either very cocky, or very naive.
Note I'm talking about serious competitors like MegaBloks, not the one who just copy badly everything LEGO makes. MegaBloks, for example, does have interesting parts (for example, plates with studs on both sides, Plate 1 x 2 connector, male:male and Plate 2 x 2 connector, male:male). These parts are interesting and many LEGO builders would like to have them, but it's unlikely LEGO would be willing to produce them now that MegaBloks has. Of course, I'm no lawyer and I understand copyright law may be much more intricate than that (there are parts which both companies produce, for example), but I'm confident this is a valid concern in the design process.