A Palworld developer reported that Nintendo was suing over three Pokemon patents, but only for $66,000 in damages. However, a videogame IP attorney said fighting the lawsuit would mean 'burning million of dollars'

Pocketpair, the developer of Palworld, published a report today detailing the terms and conditions of the intellectual-property lawsuit Nintendo filed against their studio in September. Nintendo's lawsuit alleged that Palworld had "infringed multiple patent rights," but did not specify which patents. This left us to speculate whether Nintendo was bringing their legal cannons into play over third-person Poke Balls.

Pocketpair's latest report confirms the patents that Nintendo is claiming to have infringed. Nintendo's lawsuit alleges that Palworld infringes three Japanese patents, 7545191, 7493171, and 7528390. These patents grant Nintendo protections for creature catching and horse riding mechanics.

Pocketpair's Report details the application and registration date of the patents at issue. All three were filed and granted by Nintendo in the months that followed Palworld's January 2024 release. Each of the patents asserted by the lawsuit is a continuation from a series that Nintendo originally filed in 2021, during the development of Pokemon Legends Arceus.

As IP attorney Kirk Sigmon explained in an interview with PC Gamer in September, patent continuations--called "divisional patents" in Japanese legal practice--allow a patent holder to specify additional claims as an extension of the original patent. "As you move through the process of filing divisionals, continuations or whatever, you're drafting claims which are more and more tailored to assertion," Sigmon explained. "You'll know what you're entitled to and what's not, and you can also draft claims that are targeted at the person you intend to sue."

Nintendo filed divisional patents shortly after Pocketpair began releasing Palworld gameplay videos, suggesting that Nintendo may have started to prepare for its eventual lawsuit by preparing additional patent filings.

"If they knew about Palworld or if it worried them, it wouldn't surprise me if, in September, they told their patent attorneys: 'We need claims that we believe are capable of handling them'," Sigmon told PC Gamer.

Pocketpair reports that Nintendo has also filed an injunction to stop sales of Palworld until the infringing mechanics have been removed. The patents Nintendo claims seem to cover many of Palworld's core mechanics. It would be a huge undertaking to remove and replace them. Nintendo is also seeking damages for late payments and a total of 5 million yen ($33,00) from The Pokemon Company as well as Nintendo.

Considering that Palworld has sold tens of thousands of copies, the combined $66,000 may not seem like a large fee, but according to Sigmon, these damages are only a fraction of the amount that a patent suit can cost.

"You're spending millions of dollars trying to get rid of this," Sigmon said. "You need to find specialists." You need to hire a team. You have to hire people who are good at it or you'll lose almost immediately. It can be very time-consuming and expensive, and can wear out many small companies."

While Nintendo's legal reputation has been well-earned, the patent lawsuit it filed against Pocketpair was not without risk. Pocketpair can use the lawsuit to argue, like many of us, that Nintendo's patents cover concepts that are so broad, a company cannot reasonably claim them.

Nintendo's patents may be invalidated if Pocketpair can show prior art, or other works that contain what is claimed in the asserted claims. If you are too broad, you give them a way to invalidate the patent, Sigmon said. "Because you gave them an opportunity to show that it was already existing."