How about in Czech Republic, or EU courts? There is always a way for big companies to fight small ones.

Of course one way to defend that would be to have the company be US based or with founding US partners.

They could try to bog down photopea in permanent lawsuits, but that would risk some EFF-style organization taking the other side, and now they're fighting an equal opponent, earning a lot of bad PR, and most importantly, they're providing a lot of cheap advertising for the competing product while also making themselves unpopular.

Usually by buying them. If not that by hiring 10x the amounts of the coders and copy whatever that did and then launch a massive PR campaign.