What you need to know

• Pocketpair, the developers of Palworld, are being sued by Nintendo and The Pokémon Company for patent infringement.
• Since the lawsuit was filed in September, Pocketpair stated they were not aware of what they were being sued for, and many speculated if it was the throw and catch mechanic.
• Today Pocketpair have confirmed the 3 patents Nintendo are trying to protect, and they were filed after the games launch on January 19, 2024. Nintendo is seeking 5 million yen plus late payment damages to both them and the Pokemon Company for these infringements.
• The 3 patents are the creature capture mechanic, creature combat and movement mechanic and the dynamic mounting system.

In the weeks since Nintendo announced its lawsuit against Pocketpair for alleged copyright infringement in the popular Xbox Game Pass game Palworld, the industry has been buzzing with speculation over the specific patents involved. With confirmation that the case doesn't pertain to character designs, many have wondered what Nintendo is really targeting. Today, Pocketpair released a statement detailing the exact mechanics that Nintendo claims infringe on its patents. Notably, these patents were filed only after Palworld’s release on January 19. Nintendo is seeking 5 million yen plus late payment damages to both them and the Pokemon Company for these infringements, so 10 million in total which is equivalent to $65,548 US dollars.

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The statement reads:

"Report on Patent Infringement Lawsuit

As announced on September 19, 2024, The Pokémon Company and Nintendo Co., Ltd. (hereinafter referred to as the "Plaintiffs") have filed a patent infringement lawsuit against us. We have received inquiries from various media outlets regarding the status of the lawsuit, and we would like to report the details and current status of this case as follows:

1: Details of the Lawsuit
The Plaintiffs claim that "Palworld," released by us on January 19, 2024, infringes upon the following three patents held by the Plaintiffs, and are seeking an injunction against the game and compensation for a portion of the damages incurred between the date of registration of the patents and the date of filing of this lawsuit.

2: Target Patents
Patent No. 7545191
[Patent application date: July 30, 2024]
[Patent registration date: August 27, 2024]

Patent No. 7493117
[Patent application date: February 26, 2024]
[Patent registration date: May 22, 2024]

Patent No. 7528390
[Patent application date: March 5, 2024]
[Patent registration date: July 26, 2024]

3: Summary of the Claim
An injunction against Palworld
Payment of 5 million yen plus late payment damages to The Pokémon Company
Payment of 5 million yen plus late payment damages to Nintendo Co., Ltd.

We will continue to assert our position in this case through future legal proceedings.

Please note that we will refrain from responding individually to inquiries regarding this case. If any matters arise that require public notice, we will announce them on our website, etc."

So 3 patents in total, here's what they are and why Nintendo can do this

Here’s the full breakdown of the patents in question as stated and links to where you can read them in full:

• Patent No. 7545191: This patent, owned by Nintendo and The Pokémon Company, covers a mechanic for capturing creatures by throwing an object, such as a Poké Ball, in a virtual environment. It involves defining the aiming direction based on player input and determining capture success. Nintendo claims that Palworld’s creature capture system is too similar to this patented gameplay method.
• Patent No. 7493117: This patent focuses on character movement and collision, specifically in scenarios involving character interactions and pathfinding. It also addresses a mechanic where players engage in battles by launching one creature at another. Nintendo alleges that Palworld’s mechanics around creature combat infringe on this patent.
• Patent No. 7528390: This patent describes a dynamic mounting system for characters moving across land, air, and water, allowing seamless transitions between different types of terrain. Nintendo argues that Palworld’s use of a similar system for player-controlled creatures and mounts infringes on this patent as well.

As part of the legal action, Nintendo is seeking damages from Pocketpair for using these systems—despite the fact that the patents were filed after Palworld’s launch. Is this legally sound? I reached out to Florian Mueller, a patent expert and friend of Windows Central who has provided us with for insight on this case before when reaching out to experts in the field to weigh in. Mueller, author of IPFray, who explained how Nintendo are using a 'Parent Patenting' system:

"The patent laws of many countries allow filing patent applications that are derived from earlier-filed ones. In that case, the priority date is the one of the original application. In this case, Nintendo claims earlier priority dates but opportunistically filed for derivative patents that were designed to read on Palworld. Other patent holders have done similar things in their disputes. The biggest issue here is that Nintendo is not asserting patents on genuine technological inventions but trying to monopolize game rules, which the patent system was never meant to cover."

So yes, it's all legal, if not a little underhanded. What Nintendo have done here is file new patents, based on patents filed back in 2021.

Patent laws vary by country, with the U.S., for instance, offering a one-year grace period post-disclosure for filing. Japan, however, has a “first-to-file” system, granting the patent to whoever files first, regardless of when the invention was disclosed. Filing patents after a game's launch is legal as long as it's within permitted timelines. While Nintendo’s actions are technically legal, this strategy has raised questions about the ethics of its approach, with some gamers viewing it as an attempt to corner gameplay elements and 'punch down' on Palworld who have been experiencing record-breaking success on Xbox Game Pass in with the recent launch onto PlayStation (though pointedly, not in Japan).

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"A clear case of bullying"

Mueller has documented his thoughts at length on the matter over at GamesFray, the sister site to IPFray which provided commentary on gaming legal matters, for example the Activision Blizzard acquisition by Microsoft. In Mueller's breakdown he describes Nintendo's use of the parent patenting system as "a clear case of bullying. Nintendo is a far older and larger company than Pocketpair with extensive experience in patent prosecution and patent infringement litigation."

What Mueller also points out, is that Nintendo isn’t after huge damages (the amount requested is relatively small of around $66,000). The real threat to Pocketpair is Nintendo’s request for an injunction—a court order that would stop Palworld from being sold in Japan. Because Palworld achieved most of its success on Xbox (which isn’t as popular in Japan), Nintendo’s patents only target its smaller Japanese sales, but this still poses a significant threat to Pocketpair’s future.

Palworld have already stated that they regret that they will have to "allocate significant time to matters unrelated to game development due to this lawsuit." But have recently made announcements that Palworld is headed to mobile as well as launching free skins into the game for all players.