Context: In January 2024, a small Japanese game maker named Pocketpair released Palworld, a game that literally became an overnight success of enormous proportions. It was described by some as “Pokémon with guns,” and Pokémon is Nintendo’s (and a joint venture name The Pokémon Company’s) crown jewel, besides Super Mario. That same month, the IP saber-rattling began (January 25, 2024 games fray article). Thereafter, Nintendo applied for divisionals that it optimized for the purpose of suing Pocketpair, and in September, the complaint was filed (November 8, 2024 games fray article). Last month we sent a Japanese lawyer to the Tokyo District Court in order to get access to the case file of what is the highest-profile patent litigation in the history of the video games industry (April 18, 2025 games fray article). We’re also keeping an eye on Nintendo’s efforts to obtain U.S. patents that it might assert against Pocketpair (April 3, 2025 games fray article).
What’s new: On Thursday, Pocketpair announced a change to a key gameplay mechanic in Palworld and attributed this one, as well as modifications made last year, to the Nintendo litigation (May 10, 2025 games fray article). The latest change relates to letting a player character fly on a non-player character, a feature that Pocketpair already sneak-previewed (in the form of a video) more than six months before the priority date of Nintendo’s related patents (May 11, 2025 games fray article).
Direct impact: Pocketpair’s workaround response creates two problems for belligerent Nintendo: annoying gamers is not in the interest of any industry player, and in the end Nintendo won’t obtain any meaningful remedies. In the U.S. it may not even have a basis to assert any patents in the first place. At this point, Pocketpair’s defenses in Japan appear very strong, so it could be that when all is said and done, including an appeal, there won’t be a single valid Nintendo patent left that Pocketpair infringes. And even if Nintendo prevailed, any injunction would enter into force long after a workaround having been put in place.
Wider ramifications: Sometimes a lawsuit may serve a strategic purpose even if it is lost (see, e.g., item 2 of our most recent UPC Roundup). Nintendo’s motivation to litigate may primarily be to demonstrate to the games industry at large that anyone building anything bears some resemblance to Pokémon will be sued (unless the party has a far stronger patent arsenal than Nintendo; for example, the other two major console makers, Sony and Microsoft, each hold about 25 times as many patents as Nintendo). But what Nintendo is doing in the Pocketpair case gives patent litigation a bad name. The patents-in-suit are devoid of technical substance and cover game rules, ineligible subject matter even if the Japan Patent Office (JPO) and United States Patent and Trademark Office (USPTO) sometimes grant them.
What Nintendo is — and what is not — suing over
Shortly after Palworld’s successful launch, Nintendo stated publicly:
“We have not granted any permission for the use of Pokémon intellectual property or assets in that game.”
That looked like Nintendo was going to allege that Pals, the non-player characters in Palworld, were stolen Pokémons. But that is not what happened. Instead, Nintendo ended up asserting three patents from two families:
- One patent family relates to how players catch creatures (depending on the title, Pokémons or Pals) by throwing a catching object (called Pokéball in Pokémon) at them or unleashing a fighting character.
- The other patent family is about a “smooth switching” mechanism that allows, for example, a player to ride on a horse-like creature that moves on the ground and to jump on a flying creature.
Both original patent applications were filed on December 22, 2021. The patents Nintendo is actually asserting now were derived from the original application, as divisionals, in 2024. For most members of the gamer community, it was counterintuitive that someone could file a patent application after the launch of a given product and then assert those patents against the product. But if there already was support for the new claims in the written description of the older application, claiming back priority is par for the course.
The biggest issue is that those patents are game rule patents, and the applications should have been rejected as patent-ineligible subject matter. What they cover is that if a player does A, there will be an effect B. There is nothing whatsoever in those patents that constitutes technological progress. They state a game rule and then run-of-the-mill computer components with which to make it work. The “smooth switching” family refers to things happening in a virtual 3D space, but without suggesting any improvement to a 3D engine to make it work efficiently. Enabling someone to jump from a horse right on an airplane would be a great accomplishment in the physical world and probably deserving of patent protection, but in a pixel universe, there isn’t even a meaningful distinction between riding on the ground and flying: either way, there are sets of pixels that are moving on a screen in a certain direction.
Why did Nintendo to resort to the assertion of game rule patents?
- Apparently they can’t allege any copyright or trademark infringement. Those are narrow intellectual property rights. Pocketpair calls those creatures Pals, not Pokémons, and none of its logos resemble any Nintendo brand. And Nintendo’s copyrights cover particular character designs, but not the idea of having fantasy characters that basically look like cute, friendly, cartoony monsters.
- Pocketpair uses Epic Games’ Unreal Engine. That means all 3D rendering, but also collision detection and similar functions are performed by Unreal Engine, not by Pocketpair’s own program code. If Nintendo alleged infringement at the engine level, it would — by extension — sue Epic. And Epic, the maker of Fortnite, is a key partner. Furthermore, such a hostile move against an engine used by countless games would have many repercussions, and could provoke retaliation.
Pocketpair isn’t taking any chances
Pocketpair’s defenses look solid. They have pretty good non-infringement arguments, all of which appear to hinge on claim construction. For example, one of the patents distinguishes between two different “operational inputs” (such as pressing a button on a video game controller) in a context in which Palworld uses the same button. And they have vast amounts of prior art, given that the gameplay elements claimed by Nintendo were previously found in numerous other games.
Most other companies in Pocketpair’s situation would simply rely on the strength of those defenses. But Pocketpair implemented workarounds for two U.S. patents just between the notice of allowance and the publication of the related patents, thereby making it hard, if not impossible, for Nintendo to bring any U.S. patent lawsuit in the first place. Also, while the Japanese litigation is only in the second round of written pleadings, it’s already clear that any injunction Nintendo could win would not cover Palworld in its current form.
Alienating consumers for nothing
Nintendo wouldn’t allow Pocketpair to publish Palworld on its own video game consoles. Still, Pocketpair’s customers are Nintendo’s actual or potential customers. Palworld has such a huge fan base that there will be many gamers among them who own a Nintendo console, but play Palworld on a different console or on a PC. If they don’t have a Nintendo console, they might want to buy one at some point. And even if they were never going to buy any Nintendo hardware, Nintendo also offers some mobile gamers (for iOS and Android), such as Pokémon GO.
With Pocketpair now having stated publicly that it makes changes to gameplay only because of Nintendo’s lawsuit, many millions of gamers who have to get used to different gameplay mechanics are going to be annoyed. That can’t be in Nintendo’s interest.
This will only get worse if Pocketpair achieves the revocation of the patents Nintendo is asserting (or of other family members, such as the U.S. equivalents of some of the Japanese patents-in-suit). Pocketpair can then bring back the functionality, and many gamers will hear that the Nintendo patents that required those temporary modifications turned out invalid.
Pocketpair may very well get Nintendo’s U.S. patents invalidated. They could challenge them in court under § 101 and in the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) based on prior art. Either attack vector would be pretty promising, and the probability of Nintendo fending off both types of challenges at the same time is limited.
In Europe, Nintendo isn’t even trying to obtain pure game rule patents. They were granted European patents on game rules only if there was some technical innovation by European Patent Office standards, such as making different Pokémons appear at different times of day, in which case the connection with the physical world was the use of a clock. That was also questionable, but not as obviously non-technical as switching between items that move on the ground and airborne items when both merely consist of pixels and there is no particular 3D rendering technique involved.
Patent enforcement between competitors is rare in the video games industry
For a $200B industry, the video games business sees very few patent assertions by companies against their rivals. Past enforcement was limited, and typically about graphics technologies.
We have no definitive knowledge of this, but we suspect that many companies in the games business do not like what Nintendo is doing. Everyone in the games business (other than some decision-makers at Nintendo) knows that the industry would be in trouble if there was widespread enforcement of patents on game rules, be it by operating companies or by non-practicing entities.
Nintendo is definitely not making itself any friends this way.
What’s the end game?
Nintendo may be frustrated by Pocketpair’s workarounds, but in the end it may be better even for Nintendo itself if the dispute doesn’t escalate through an additional U.S. lawsuit.
In Japan, the possible outcomes are that
- Nintendo loses (some of the non-infringement and invalidity defenses appear very strong) or
- Nintendo scores a merely symbolic victory (because Pocketpair has already worked around the patents anyway).
The lawsuit against Pocketpair may have discouraged other companies from making games with creatures that bear an abstract resemblance to Pokémon. But at this point Nintendo is unlikely to get anything useful out of this litigation. For Pocketpair, it’s a distraction. Gamers are affected because they have to adapt to modified game mechanics.
A hearing at which the court indicates its inclination will take place in the fall. Maybe the court can convince Nintendo to withdraw the complaint. It’s not that Nintendo doesn’t know about patent litigation. It regularly has to defend against patent assertions and has a great reputation in IP circles for its prior art searches.
Court, case, counsel
Case number: Reiwa 6 (Wa) No. 70421
Date of complaint: September 18, 2024
Plaintiffs: Nintendo and The Pokémon Company
Defendant: Pocketpair
Court: Tokyo District Court, Civil Division 40
Presiding Judge: Motoyuki Nakashima (who was a Visiting Scholar the Max Planck Institute in Munich and is considered one of Japan’s most experienced patent-specialized judges)
Counsel for Nintendo: TMI‘s Shuhei Shiotsuki, Makoto Okada and 5 others.
Counsel for Pocketpair: Nishimura & Asahi‘s Iwase Hitomi, Takatoshi Monya and 11 others; together with Sugimura & Partners‘ Sugimura Kenji and/or Sugimura Koji, Fukazu Takuhiro and 4 others.