What Lessons Can Developers Learn from the Ongoing Palworld and Pokémon Debate?

The recent release of Palworld has sparked intense debate among gamers and industry experts, with many drawing comparisons between its creatures and those found in the Pokémon series. On social media and Reddit, the term 'Pokémon with guns' has emerged as a colloquialism for Palworld, a multi-million selling survival game developed by Pocketpair. However, according to legal experts, this is not a straightforward case of copyright infringement. Peter Lewin, a partner at Wiggin, notes that while it's valid for players to express concerns when they feel one game takes too much inspiration from another, the legal perspective is more nuanced. 'The feeling that one game has borrowed too heavily from another is a matter of personal opinion, but from a legal standpoint, the question of whether intellectual property infringement has occurred is a separate issue.' Lewin points out that although Palworld and Pokémon share similarities, they also have distinct differences in terms of gameplay mechanics, combat systems, and survival elements. Nick Allan, head of interactive entertainment at Lewis Silkin, observes that the excitement surrounding these games has led to a conflation of distinct legal issues. 'Intellectual property encompasses various rights that protect different aspects of proprietary material, including trademarks, copyrights, design rights, and patents.' Allan explains that different jurisdictions have different rules regarding intellectual property, which can lead to varying outcomes in the courts. The fact that Palworld is available in over 100 countries via Steam further complicates the situation. Richard Hoeg, managing partner of The Hoeg Law firm, suggests that Palworld's creature designs are attempting to evoke the feeling of Pokémon without directly copying them. However, he acknowledges that the line between influence and infringement can be blurry. 'Absent a direct theft of assets, characters, or textures, the question becomes whether the designs themselves are substantially similar in areas that can be protected.' The lawyers emphasize that copyright law protects expressions of ideas, not the ideas themselves. While gameplay mechanics like catching monsters are not protected by copyright, the specific appearance of characters or objects is. Palworld's Pal Spheres bear no resemblance to Pokéballs, which reduces the likelihood of issues for the developer. Hoeg notes that Pocketpair's primary defense would be that no design was directly stolen and that the feeling of Pokémon is not entitled to protection. A secondary defense could be parody or satire, arguing that the game is commenting on the absurdity of the Pokémon universe. Lewin adds that if one game copies a character design from another, it would constitute a substantial part. However, when character designs are similar but not identical, it becomes more complicated. The consideration then becomes whether the similar elements are substantial, requiring a side-by-side comparison to assess similarities and differences. Typically, the IP owner must prove that their work has been directly copied, although some courts have deemed similarities to be so striking that they have put the burden on the defendant to justify that they did not copy the original. Lewin notes that assessing copyright infringement boils down to answering three questions: Is the original work protected by copyright? Has the alleged infringer copied a substantial part of the original work? Are there any available defenses? The defense used would depend on the country where legal action is taken. Allan suggests another potential line of defense for developers, highlighting the availability of the registered design system in the UK and EU. It's worth noting that neither Nintendo nor The Pokémon Company has taken legal action against Palworld, despite player assumptions that they could easily justify it. The only action taken was against a mod that put recognizable Pokémon characters into Palworld, which was removed but has since returned with 'legally-distinct pocket creatures.' The Pokémon Company has issued a statement emphasizing that it has received queries regarding a game released this month and intends to investigate and take appropriate measures to address any acts that infringe on intellectual property rights related to Pokémon. Allan observes that Palworld is barely a couple of weeks old, which is not a very long time in a legal context. In cases like this, the legal position remains complicated, and most companies will avoid making formal allegations until they have carried out a proper investigation. Lewin adds that a number of considerations go into deciding whether or not to pursue another party for infringement, including the legal basis, cost, jurisdictional issues, competing internal priorities, and brand reputation. Hoeg believes there's no reason to believe Palworld does actually infringe on Pokémon, even if the character designs 'fly a bit close to the sun for my personal legal taste.' The takeaway for developers is that they should be cautious when creating characters or elements that resemble established IPs. Lewin warns that developing something that resembles an established IP 'can be a dangerous game to play,' as it can be difficult to determine whether the similarities are substantial enough to constitute infringement. Allan notes that the success of Palworld comes from its combination of open-world survival action, base management, and creature capturing – none of which is protectable by IP laws. His suggestion would be to steer clear of the types of IP assets that are easily protected by others, such as character designs. Hoeg concludes that developers should not take broad lessons on intellectual property matters from any given conflict point, as there are too many specific facts and circumstances that determine both whether a rights holder wants to take action and whether a court wants to make that a very bad day.