Lessons for Developers from the Palworld vs Pokémon Debate

Many individuals believe that Palworld bears a striking similarity to Pokémon.

Comparisons between the characters of Game Freak’s long-standing franchise and the recently released survival game have been widely discussed on social media and Reddit, leading to the unofficial label of ‘Pokémon with guns’ for developer Pocketpair’s new IP.

However, legal professionals tell GamesIndustry.biz that the situation is not as clear-cut as some Reddit users claim it to be.

“It’s valid for players to express when they believe that one game draws heavily from another in terms of content, appearance, and more,” Peter Lewin, a partner at Wiggin, explains. “But how players feel is a separate matter from whether or not IP infringement has taken place from a legal standpoint.”

“While these two games share similarities, they also have distinct differences in gameplay, combat mechanics, survival aspects, and more.”

Nick Allan, Lewis Silkin

Nick Allan, head of interactive entertainment at Lewis Silkin, notes that the buzz around the games has led to “some blending of distinct legal matters,” and clarifies what would be at stake if legal action were pursued.

He explains, “Intellectual property is not a solitary right, but a collection of various rights that safeguard different aspects of proprietary material. Trade marks protect brands from consumer confusion, copyright guards against unlawful copying of original creative works, design rights protect the look of novel designs from use on other products, and patents grant temporary exclusive use of inventive ideas with industrial application.”

Allan adds that the differences in IP rules across various jurisdictions can complicate the legal position, especially for a game like Palworld, which is available in over 100 countries through Steam.

“This complexity makes the legal stance more nuanced and intricate than some initial assessments suggest,” he says.

“Just because Nintendo doesn’t move against something doesn’t mean it’s not infringing. If they do, it doesn’t automatically make them right”

Richard Hoeg, The Hoeg Law Firm

Richard Hoeg, managing partner at The Hoeg Law firm, delved into this issue extensively in an episode of his Virtual Legality podcast. He argues that Palworld’s creature designs are “trying to evoke the feeling of Pokémon,” which is not inherently unlawful.

“The line between influence and infringement is not as clear as gamers (or developers) might prefer,” he adds. “Without direct theft of assets, characters, textures, or similar elements, we must consider whether the designs themselves are ‘substantially similar’ in areas that can be protected. So not vague shapes, colors, or even proportions, but specifics, which is largely subjective.”

“It’s a grey area, but not one that necessarily favors the rights holder, particularly if they don’t want to risk appearing as the antagonist or setting an unfavorable precedent,” Hoeg explains.

All three lawyers emphasize that copyright law does not protect ideas, but instead expressions of ideas. While gameplay mechanics like catching monsters are not protected, the specific appearance of characters or objects will be. Based on this, Palworld’s Pal Spheres, for example, are unlikely to raise issues for developer Pocketpair.

“Pocketpair’s main defense would be that no design was directly stolen and that the essence of Pokémon is not entitled to protection,” Hoeg elaborates. “The secondary defense might be parody or satire, claiming that even if the court finds they crossed the line, it was all an attempt to ‘comment on’ the absurdity of the Pokémon universe. The latter approach is more challenging and may not achieve the same success, particularly in Japan, where any potential case is most likely to be brought.”

Peter Lewin, Wiggin

Lewin adds, “If one game duplicates a character design exactly from another game, that would definitively constitute a substantial part. When character designs are similar but not identical, the situation becomes more complex. The question then becomes whether the similar elements are ‘substantial.’ This would necessitate a side-by-side comparison of the monsters in question to evaluate similarities and disparities.

“Also, the mere presence of differences between two works does not negate the possibility of copying – in other words, differences do not equate to innocence.”

Typically, it is up to the IP owner to prove that their work has been directly copied. However, Lewin highlights that some courts have considered similarities to be so pronounced that they place the burden on the defendant to justify that they did not copy the original – a situation that “could be challenging when dealing with an IP as iconic and widely recognized as Pokémon.”

Lewin notes that assessing whether a developer has breached another’s copyright comes down to addressing three questions:

  1. Is the original work actually safeguarded by copyright?
  2. Has the supposed infringer copied a substantial part of the original work?
  3. Are there any available defenses (e.g. parody, fair use)?

The choice of defense would hinge on the country where legal action is taken. Meanwhile, Allan suggests another potential defense for developers.

“While there is significant focus on using copyright and trademarks to protect the appearance of video game characters, the registered design system in the UK and EU is often overlooked,” he explains. “It can be quite influential if the drawings are done appropriately.”

“How players feel is a completely different question from whether IP infringement has occurred from a legal perspective”

Peter Lewin, Wiggin

It’s important to note that, despite players assuming that legal action against Palworld could be easily justified, neither Nintendo nor The Pokémon Company have taken any action thus far. The only action taken by these companies has been against a mod that introduced recognizable Pokémon characters into Palworld, which was removed but has since returned with “legally-distinct pocket creatures.”

Meanwhile, The Pokémon Company has issued a statement emphasizing that they have received multiple inquiries regarding a game released this month and aim to “investigate and take appropriate measures to address any acts that infringe on intellectual property rights related to the Pokémon.”

Allan notes that Palworld is still very new, and in cases like this – i.e. not a blatant copy or piracy – the legal position remains quite intricate.

“Most companies will refrain from making formal allegations until they have conducted a thorough investigation, especially if possible,” he says. “It can be detrimental if you need to alter your case and legal arguments later after more evidence and analysis come to light following a full investigation. It can often take weeks or even months to prepare a legal case, particularly if multiple territories are involved, so I would not read too much into this at this stage.

“The Pokémon mods present a different scenario.”

Palworld’s focus on survival skills and base management means that it plays very differently to Pokémon titles

Lewin adds, “Various factors must be considered when deciding whether to pursue legal action against another party for infringement. Obviously, there’s the legal basis (i.e. do I think I have a strong case to prove infringement), but there’s also cost, jurisdictional issues, competing internal priorities, brand reputation etc. As such, it’s hard to predict with certainty how different IP owners will react when they feel another work is too close to the bone.”

Hoeg believes there’s no reason to believe Palworld actually infringes on Pokémon, even if the character designs “fly a bit close to the sun for [his] personal legal taste.”

“The legal position rather more nuanced and complicated than some hot-takes out there might suggest”

Nick Allan, Lewis Silkin

“Following the game’s early release, once it became clear that the game is both highly popular and vastly different from a standard Pokémon title in terms of gameplay, it seems likely the rights holders chose not to pursue separate legal action.”

He adds, “Just because Nintendo doesn’t elect to take action doesn’t mean there is no infringement, and just because they do, doesn’t automatically make them right about the infringement. There are several business reasons for a company to pursue (or not pursue) legal action.”

So what should developers take away from this? How concerned should they be if their characters or another specific element of their game is similar to those of an established IP?

Lewin warns that developing something that resembles an established IP “can be a dangerous game to play,” adding: “Make them too different and no one will recognize the inspiration, but make them too similar and you’re playing in risky areas of copyright infringement. Generally speaking though, the more unusual and unique a character is, the easier it will be for that IP owner to argue that copying has occurred.”

Richard Hoeg, The Hoeg Law Firm

“It doesn’t just come down to how characters are visually portrayed though. If there are similarities in other areas (character persona, lore, move sets, special abilities, iconic weapons, and so on) those could all be relevant factors when assessing whether or not copying has occurred.”

Allan mentions that he’s “only a few hours into Palworld” himself, but suggests that the game’s success comes from its combination of open-world survival action, base management, and creature capturing – none of which is protectable by IP laws.

“Where a developer has come up with compelling game mechanics that are generally free to use, my suggestion would be to steer clear of the types of IP assets that are much more easily protected by others, such as character designs.”

Hoeg concludes: “I wouldn’t recommend taking broad lessons on intellectual property matters from any given conflict point, honestly. There are too many specific facts and circumstances that determine both whether a rights holder wants to give you a bad day, and whether a court wants to make that a very bad day.”

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