What can developers learn from the Palworld vs Pokémon debate?

There are a lot of people who think Palworld has more than a passing resemblance to Pokémon.

Social media posts and Reddit threads have been dedicated to comparisons between Game Freak's decades-old characters and those of this month's multi-million selling survival game, with the term 'Pokémon with guns' established as the unofficial tagline for developer Pocketpair's new IP.

But legal experts tell GamesIndustry.biz this is not as open-and-shut a case as some Reddit users would have you believe.

"I think it’s valid for players to voice when they feel that one game takes too much inspiration from another in terms of content, look and feel, and so on," Wiggin partner Peter Lewin tells us. "However, how players feel is a completely different question from whether or not IP infringement has occurred from a legal perspective.

"While these two games have their similarities, they also have very obvious differences in terms of moment to moment gameplay, combat mechanics, survival elements, and so on."

Lewis Silkin's head of interactive entertainment Nick Allan observes that all the excitement around the games has caused "some conflation of distinct legal issues" – a common occurrence, he notes – and it's worth clarifying what would actually be in dispute here if legal action were to take place.

"Intellectual property is not a single right, but a collection of various rights that protect different elements of proprietary material," he explains. "For example, and speaking in general terms, trade marks protect brands from consumer confusion, copyright protects against the unlawful copying of original creative works, design rights protect the appearance of novel designs for products from use on other products, and patents grant temporary exclusive use of inventive ideas with industrial application."

He adds that different jurisdictions also have different rules on IP, so the courts of one country may say a game is infringing rights while those of another may not – a situation made even more complex by the fact Palworld is available in over 100 countries, thanks to Steam.

"This all makes the legal position rather more nuanced and complicated than some hot-takes out there might suggest."

"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 of The Hoeg Law firm, discussed this issue at length in an episode of his Virtual Legality podcast. Speaking to GamesIndustry.biz, he suggests that Palword's creature designs are "trying to evoke the feeling of Pokémon," which is not inherently illegal.

"Unfortunately, the line between influence and infringement is not as clear as gamers (or developers) might like," he adds. "Absent a direct theft of assets, characters, textures, or similar, we’re left asking whether the designs themselves are 'substantially similar' in those areas which can be protected. So not vague shapes, colours, or even proportions, but specifics, which as you can imagine is largely going to be in the eye of the beholder.

"It's a grey area, but not one that really advantages the rights holder – especially if they don't want to run the risk of seeming like the bad guy or setting a bad precedent."

The point that all three lawyers emphasise is that copyright law does not protect ideas, but instead expressions of ideas. Gameplay mechanics – like, say, catching monsters to add to your party – are not protected by copyright, but the specific appearance of characters or objects will be. Palworld's Pal Spheres bear no resemblance to Pokéballs, so are unlikely to cause issues for developer Pocketpair.

Again, Hoeg – who acknowledges he hasn't analysed all of Palworld's pals in the way a rights holder would – says he's yet to see any that would arm The Pokémon Company with the "silver bullet of a direct copy."

"Pocketpair's primary defence would be that no design was expressly stolen and that the feeling of Pokémon is not entitled to protection," he explains. "The secondary defence might well be parody or satire, saying that even if a court thinks they crossed the line on use, it was all in an effort to 'comment on' the absurdity of the Pokémon universe. The second path is harder and may not be as successful in Japan, where the case [if any] is most likely to be brought."

Lewin adds: "If one game copies a character design one-to-one from another game, that would clearly constitute a substantial part. Where character designs are similar but not identical, that gets more complicated. The consideration then becomes whether the elements which are similar are 'substantial.' That would require a side-by-side comparison of the monsters in question to assess similarities and differences.

"Also, the mere fact that there are some differences between two works does not negate the possibility that copying occurred – i.e. differences does not equate to innocence."

Typically, it falls upon the IP owner to prove that their work has been copied directly, although Lewin observes that some courts have deemed similarities to be so striking that they have put the burden on the defendant to justify they did not copy the original – which "could be tricky when talking about an IP as iconic and widely known as Pokémon."

Lewin notes that assessing whether a developer has infringed on another's copyright boils down to answering three questions:

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

The defence used would depend on the country where legal action was taken. Meanwhile, Allan suggests another potential line of defence for developers.

"There is always a lot of thought given to using copyright and trademarks to protect the appearance of video game characters, but people often forget about the availability of the registered design system in the UK and EU," he says. "It can be quite a powerful tool, if the drawings are done properly."

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

Peter Lewin, Wiggin

It's worth noting that, for all the players' assumptions that Nintendo or The Pokémon Company can easily justify legal action against Palworld, neither company has done so. To date, the only action these companies have taken is against a mod that does put recognisable Pokémon characters into Palworld, which was removed but has since returned with "legally-distinct pocket creatures."

Meanwhile, The Pokémon Company has issued a statement emphasising that – while not naming Palworld specifically – it has received a number of 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 the Pokémon."

Allan observes that Palworld is barely a couple of weeks old, which is "not a very long time in a legal context" and in cases like this – i.e. not a blatant clone or piracy – the legal position remains fairly complicated.

"Most companies will avoid making formal allegations until they have carried out a proper investigation, at least if they can help it," he says. "It can be detrimental if you need to change your case and legal arguments later after more evidence and analysis comes to light following a full investigation. It can often take weeks or even months to prepare a legal case, especially if multiple territories are involved, so I would not read too much into this at this stage.

"The Pokémon mods are a different story."

Lewin adds: "A number of considerations go into deciding whether or not to pursue 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 does actually infringe 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

"After early release, once it became apparent that the game is both very popular and very different from a standard Pokémon title in terms of gameplay, it seems likely the rights holders elected not to pursue separate legal action."

He adds: "Just because Nintendo doesn’t elect to move against something doesn’t mean it’s not infringing , and just because they do, doesn’t automatically make them right that there is infringement. There are a number of business reasons for a company to pursue (or not pursue) legal action."

So what's the takeaway for developers? How concerned should they be if their characters or another specific element of their game is strikingly 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 recognise 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.

"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 notes that he's "only a few hours into Palworld" himself, but posits 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."