Nintendo's Patent Strategy Takes Aim at Palworld

The recent lawsuit filed by Nintendo and The Pokémon Company against Pocketpair, the developer of Palworld, has sparked intense interest in the gaming community. On September 19, 2024, Nintendo issued a press release announcing the lawsuit, which seeks to stop Palworld's alleged infringement of multiple patent rights and claims damages. Palworld, released in early access on January 19, 2024, has gained significant traction, with over 25 million players, rivaling the popularity of blockbuster games like The Legend of Zelda: Tears of the Kingdom and Hogwarts Legacy. The game is set in an open world where players can battle, capture, and utilize creatures known as 'Pals' for various activities. The lawsuit's focus on patent infringement rather than copyright infringement has raised eyebrows, particularly given the timing, which coincides with the imminent Tokyo Game Show. Some speculate that Nintendo's emphasis on patents indicates a shift away from pursuing copyright claims. However, given Nintendo's history of aggressive litigation, it's unlikely they have abandoned the possibility of copyright infringement claims entirely. The challenge in arguing that Pals too closely resemble Pokémon in appearance might be significant, making it less likely for Nintendo to pursue copyright or trade secret claims in the U.S., especially without evidence of improper access to Pokémon's 3D models. A more pressing question is whether Nintendo will pursue patent litigation in the U.S. similar to the Japanese lawsuit. The lack of information about the specific patents involved in the Japanese suit makes this difficult to determine. Pocketpair has stated they are unaware of the specific patents they are accused of infringing, and unlike in the U.S., the complaint listing the allegedly infringed patents is not publicly available. Speculation about which patents might be asserted centers around co-ownership between Nintendo and The Pokémon Company and the timing of patent application filings. A list of 28 possible patents has been generated by a Japanese patent attorney, with particular relevance attributed to four Japanese issued patents: JP 7545191, JP 7528390, JP 7493117, and JP 7505854. These patents, which were accelerated to issuance, relate to aspects of catching and riding 'combat characters' or 'airborne rideable characters' using 'player characters.' Four U.S. counterpart applications (US-App-1, US-App-2, US-App-3, and US-App-4) have been identified, with US-App-3 and US-App-4 filed in May 2024, after Palworld's release, and expedited through the Track One program. The first independent claims of US-App-3 and US-App-4 appear to be crafted to cover aspects of Palworld, particularly the behavior of Pal Spheres. Both applications received their first Office Actions in July 2024, with rejections for subject matter eligibility and obviousness, respectively. Nintendo must respond to these rejections by October 19 and October 31 to maintain Track One status. The outcome of Nintendo's litigation in Japan and the progression of these patent applications will be crucial in determining whether similar suits will be filed in the U.S. The seriousness with which Nintendo views the threat of Palworld is evident in their patent strategy. If successful, this could signal a shift in the video game industry's approach to patents for in-game features. The Palworld saga is unfolding rapidly, and its implications for intellectual property in the gaming industry are significant.