They can but it is more expensive than filing them and you generally need deep pockets to do so. The issue with US patents specifically is that the whole system is rigged to big corporations flooding the system with patents that are not challenged because the patent offices are underfunded. This allows these big corporations to create a defensive buffer that they use against each other and much smaller competitors. Challenging that requires deep pockets. Companies like Apple, routinely settle patent licensing conflicts outside the courts. E.g. Nokia still receives a fair bit of revenue from them for patents the iphone and related products obviously infringe upon. Likewise Qualcomm taps into mobile phone sales revenue using their heavily patented proprietary solution for building 4G and 5G modems.

But like patents or not, they are real and they are a factor to take into account when doing business.

In this case, what3words seems to have genuinely come up with a way to translate coordinates into pronounceable words. You might not agree their method is particularly interesting, sophisticated, valuable, etc. But a similar enough method did not really exist prior to them. And they patented that method. And they got the patent. What that means legally is that the claims in the patent are legally enforceable against others doing a me too service. Unless they challenge all of those claims of course. The issue with prior art is that it usually only affects some of the claims. So, you might feasibly manage to weaken the patent somewhat in court at great cost but probably not in it's entirety.

So, e.g. Apple or Google suddenly promoting a service that allows you to refer a map location on their using a bunch of words would be a problem as it would obviously infringe on one or more claims in the patent. Of course they have deep enough pockets that they could try to challenge the patent. But they might lose. It's more likely they'd attempt an acquisition and add the patent to their portfolio. That in a nut shell is why what3words might be considered a good investment by some: they are an obvious acquisition target with a customer base, some revenue, a brand name, etc. To me 80M raised in funding sounds excessive though. But it explains why they are eager to defend their IP: without that their valuation tanks.

This lawsuit interestingly is not about the patent but about copyright. I assume the list of words used by their patented algorithm is the issue here. That list of words is not part of the patent. That copyright seems defensible as well. It's a list they came up with, that they own the copyright of, that is essential to them and somebody else is publishing that list without their permission. Copyright exists to allow people to put a stop to that sort of thing. Hard to argue against that.