Nintendo Alleges It’s "Game Over" On Palworld's Patent Infringement

As one of the biggest game franchises of all time, it's safe to say that Pokémon has had a huge impact on the entertainment industry, not to mention the childhoods of millions worldwide. Now, a new challenger has appeared: Palworld, a comedic spin on the traditional monster-taming genre. Palworld took the gaming world by storm when it released on early access this year. Comparisons were immediately drawn between the two games, from creature designs to gameplay mechanics.

However, it wasn't just players who noticed similarities between the two: Nintendo's notoriously strict stance on protection of its brand meant that it was only a matter of time before the developers of Palworld landed in hot water. A new patent infringement lawsuit filed by Nintendo now seeks to block the official release of Palworld, the outcome of which has the potential to shape the future development of video games.

 Nintendo Usually Catches ‘Em All

Pokémon is a Japanese video game franchise focused on catching creatures called "Pokémon" and training them to battle other Pokémon, often against a villainous criminal organisation with aspirations of world domination. Since it was first published by Nintendo in 1996, it has become one of the highest-grossing media franchises of all time, spawning TV series, films, merchandise and spin-off games, with many Pokémon becoming iconic characters in their own right. As a result, Nintendo has historically been fiercely protective of its intellectual property, employing aggressive legal tactics against emulators, fangames, and even user-created gameplay videos.

Palworld is an action-adventure survival game centered on monster taming, set in an open world inhabited by animal-like creatures (the eponymous "Pals"). Upon launching in January, 2024, Palworld has become a runaway success, selling 5 million copies in 3 days and reporting 1.3 million concurrent PC players at its peak. While Pocketpair has not cited Pokémon as one of their main inspirations for Palworld, the game's 2021 reveal trailer quickly garnered it the nickname "Pokémon with guns" among journalists and players. Fan-made mods that add Pokémon to Palworld have been created and promptly taken down by Nintendo's legal team less than 24 hours later. The Nintendo lawsuit therefore came as a surprise to absolutely no one.

Lawsuit Surrender Now or Prepare to Fight

On 19 September 2024, Nintendo announced that it was filing a patent infringement lawsuit in the Tokyo District Court against Pocketpair, seeking an injunction and compensation for damages. Details of the lawsuit were not made public until November 8, when Pocketpair reported which three patents it had allegedly infringed on, as well as the amount of damages to be sued for.

The patents, all registered in Japan, include a system for using items to capture characters in a virtual space, such as throwing a ball at characters in a field, an aiming system for that purpose, anda system for riding characters). These were all applied for and registered after the release of Palworld, although Nintendo had also applied for counterpart patents in the US as early as September 2022. Consequently, Nintendo is seeking an injunction against Palworld to block its release, and compensation for damages incurred between the patents' registration date and filing of the lawsuit, on top of 5 million JPY.

What About Copyright Law?

This lawsuit is noteworthy for being a patent lawsuit instead of a copyright claim: analysts have speculated that this is because Nintendo could not make a case for Palworld characters being too similar to Pokémon, and decided to focus on gameplay mechanics instead to make a stronger argument. If they prove to be successful, this could set a worrying precedent for game developers, as a patent grants the right to prevent others from using that invention. Patent litigation usually comes at the cost of considerable time and money, which is undoubtedly not a concern for Nintendo but may pose a challenge for Pocketpair, a small studio with less than 50 employees. While studios are still free to create similar systems with enough distinct elements to make them stand out from the patented invention, the threat of expensive litigation followed by having to pay for damages could act as a deterrent and create a climate detrimental to creativity.

Registration of software patents in the US has been steadily growing in recent years and there are precedents for the content of a video game being granted patent protection. Warner Bros. was infamously granted a patent in 2021 for their "Nemesis system" in the game Middle Earth: Shadow of Mordor, a mechanic that makes enemy NPCs (non-player characters) change their behaviour based on their previous interactions with the player. This feature was acclaimed at launch for the depth it added to the game, making each player's experience unique by creating a villain that responds directly to their actions. News of the patent registration drew criticism from the games industry, with developers citing the fact that the Nemesis system was plainly inspired by mechanics from other games, and expressing concerns that the broadness of the patent would prevent similar work from being developed. If Nintendo is successful, the same effect may occur with other studios, where fear of legal repercussions leads to developers taking less risks with their games.

The impact on smaller game developers is especially worrying, more so if they are forced to pay high license fees for the right to use the invention. Patents differ from copyrights in that they do not give the owner the right to make, sell or use the registered invention, only to prevent others from doing so for commercial gain. The owner of a patent is not obligated to pursue legal action against an infringing user, and having the right to do so does not automatically mean that an action will succeed. However, given Nintendo's remarkable track record for winning lawsuits that they have initiated, it seems likely that a successful case against Palworld would discourage others from even attempting to create something similar.

The lawsuit may take years to conclude, and all this before Palworld is even officially released. It's too early on in the litigation process to say which way the case could go, but what we do know is that Nintendo's approach to perceived infringers of their IP seems to mirror that of a Pokémon player. "Gotta catch 'em all!"

Related Resources:

• Why a Patent May Be Vital to Your Business (FindLaw's Law and Daily Life)
• Find a Patent Lawyer Near You (FindLaw's Lawyer Directory)
• Nature of Patents and Patent Rights (FindLaw's Learn About the Law)