Upstart Palworld has taken the gaming world by storm, but is the Pokémon company about to rain on their parade? An IP Lawyer’s take on Palworld’s fate.

Pokémon with guns?

Launched on Steam and Xbox on January 19th, Palworld has quickly become a gaming phenomenon, selling a staggering 20 million copies in just 2 weeks and sparking heated debates about intellectual property theft in the gaming industry.

Palworld (by developer Pocketpair) is an open-world RPG game that blends a survival theme with a suspiciously familiar mechanic – the catching and taming of cute little creatures known as Pals. Pals can be tasked with building, farming, harvesting, and mining. Oh, and one more thing, Pals can be equipped with weapons. It is this aspect of the game that has led fans to refer to it as “Pokémon with guns”.

In the midst of the furore, the Pokémon Company has issued a statement without explicitly naming Palworld, reinforcing that they “have not granted permission for the use of Pokémon intellectual property or assets in that game… [and that they] intend to investigate and take appropriate measures to address any acts that infringe on intellectual property rights”.

In an interview with gaming website Automaton, Pocketpair’s CEO Takuro Mizobe stated that any resemblance to the celebrated franchise was not deliberate. He said, “[w]e make our games very seriously, and we have absolutely no intention of infringing upon the intellectual property of other companies”.

To date, the Pokémon Company has not taken any actual legal action against Palworld. However, does Palworld do enough to distance itself from Pokémon functionally while also being a little too close for comfort artistically?

Potential copyright infringement

A key principle in copyright law is that it is not the idea that is protected, but the expression.

The Pokémon Company, Game Freak and Nintendo collectively own the copyright in a whole host of different works – such as the computer program or game code (a literary work), the music from the Pokémon soundtrack (a musical work or sound recording) and, of course, the Pokémon themselves (artistic works).

However, they do not own the idea of a game around players collecting monsters and battling them.

In a copyright enforcement matter, the way you frame your case matters. The precise treatment of the copyrighted subject matter that is allegedly infringed is of utmost importance, and the success of the action hinges on what exactly is pleaded. Bearing in mind that we only have access to publicly available information, a potential case here could be focused on the artistic works – namely, the substantial visual similarity between certain Pals and certain Pokémon.

This is a comparison of some of the more similar Pals and Pokémon:

Image Sources: Pocketpair, The Pokemon Company

The fans are gonna catch ’em all

One of the most fascinating quirks of intellectual property in the gaming arena is the legions of invested fans, many of whom see themselves as guardians of a beloved franchise. Armed with a combination of sophisticated technical expertise and a vigilante desire to safeguard creative integrity, their efforts often involve collaboration with other fans, forming online communities and quasi-legal teams to pool resources and knowledge. This collective action amplifies their impact and showcases the power of a dedicated fanbase in policing copyright infringement.

In a post on X (formerly Twitter) comparing the creatures in Pokémon and Palworld, user @byofrog superimposed 3D models from both games to find that some of the character designs shared near-exact proportions.

Another fan has published a YouTube video categorising Palworld characters into possible plagiarism tiers:

@onadock (1 February 2024), Fixing The PALWORLD Plagiarism Tier list, Youtube. https://www.youtube.com/watch?v=v-O0f0kmMhg

Pocketpair could argue that their use of Pokémon character designs is protected under fair use, but their designs potentially lack the transformative humour or critique usually needed for parody protection. Additionally, both games target similar audiences, further strengthening the copyright infringement case.

Are Palworld’s characters transformative, or will they incite transformative change in Pokémon?

In the event that the Pokémon Company is able to prove copyright infringement of the Pokémon designs (substantial similarity between various Pals and Pokémon), they run into another problem. The likely outcome is that the court will order Palworld to remove the infringing Pals from the game, not take down the game completely.

Palworld has probably factored this into their strategy - its characters with more similarities to Pokémon are arguably less crucial to the gameplay and can be redesigned easily.

This means that unless the Pokémon Company can find a way to remove Palworld from the market completely, they will have a legitimate competitor for the first time since Digimon. Additionally, even if the Pokémon Company initiates litigation against Palworld, it will take a substantial amount of time and resources to achieve their goals. There might also be a negative backlash from Palworld fans who might view such an action as a big corporation bullying a smaller independent studio.

Palworld's success, despite its controversial similarities to Pokémon, could actually benefit the Pokémon franchise in the long run. Competition often drives innovation, and while the Pokémon franchise might not be introducing guns (which will torpedo its family-friendly rating), Palworld's popularity might finally challenge the Pokémon Company to freshen up its repetitive series.

While all this is pending, interestingly, a fan has already managed to get themselves into hot water by adding Pikachu as a Pal in a modified Palworld server:

Video reproduced from https://www.instagram.com/reel/C2kDTjNRj1H/?igsh=bm0ydWd1bjN0Yms3 for the purpose of news reporting.

Testing the Limits of Fair Use and Copyright

Why has Palworld flown so close to the Pokémon sun? Arguably, Palworld has courted a strategy of deliberate controversy through its overt similarities to Pokémon, aiming to generate buzz and capitalising on pre-existing brand recognition. This can be a double-edged sword, attracting players curious about the controversy but also potentially damaging the game's image.

Palworld is arguably pushing the boundaries of fair use to see how much they can borrow from Pokémon design elements without legal repercussions. As Palworld seems to have struck gold, silver, ruby, sapphire, emerald, diamond and pearl with their breakout success, it’s clear that a derivative marketing strategy can be incredibly effective, especially when targeting audiences already engaged with an established brand.

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Disclaimer

This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. That.Legal LLC represents neither party in this dispute and is not privy to any confidential information pertaining to the parties. All facts stated herein are compiled from publicly available sources. If you require any advice or information, please speak to a practising lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of That.Legal LLC accepts or assumes responsibility, or has any liability, to any person in respect of this article.

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