I would wager pretty good money that most of the far-right renditions of pepe are not digital copies but instead new artwork.
It doesn't matter if someone is making their own copy of Pepe the Frog. It's still Pepe the Frog and is not theirs to copy. This is why you don't see Tony the Tiger on your local store brand of frosted cornflakes; you might see a generic cartoon tiger, if that store brand is particularly small and feeling exceptionally lucky.
Who is providing the funding behind this legal action? Pepe was never a particularly successful commercial endeavor. The artist musst have backing from somebody with a political axe to grind.
Pepe is Matt Furie's creation. It doesn't matter if he hasn't earned a single penny from it; it's still his creation do do with as he pleases.
Matt Furie is getting pro bono legal support from Wilmer Cutler Pickering Hale and Dorr LLP. Pro bono means "for free".
As it turns out, there are lots of people who believe very strongly that the alt right is an active threat to civil society and antithetical to American values. Many of these people will happily donate their time, energy and money to shutting the alt-right down through legal action, political advocacy, and public outreach. There's nothing nefarious, illegal, or immoral about that in America. It's a free country.