Nintendo’s ongoing legal battle with Palworld developer Pocketpair has taken another unexpected turn after a Japanese patent application connected to the dispute was rejected by the Japan Patent Office.

The decision does not end the lawsuit, but it could create another headache for Nintendo as the company continues its patent infringement case against the developers of Palworld.

What Is the Nintendo Palworld Patent Dispute About?

Nintendo and The Pokémon Company filed a patent infringement lawsuit against Pocketpair in September 2024.

The companies are seeking an injunction against alleged patent infringement, as well as compensation for damages. Importantly, the lawsuit is focused on patented gameplay mechanics, rather than simply claiming that Palworld’s creature designs look too similar to Pokémon.

The case is being heard in Japan, where both Nintendo and Pocketpair are based.

Nintendo’s claims involve gameplay systems related to mechanics such as capturing creatures and interacting with them in a virtual environment.

Pocketpair has previously made changes to Palworld in response to the legal dispute, including altering mechanics that were considered relevant to Nintendo’s claims. However, the lawsuit itself remains ongoing. A patent attorney’s recent analysis of the case states that no judgment, settlement or injunction has been issued as of July 2026.

Japan Patent Office Rejects Related Nintendo Patent

The latest development concerns a Nintendo patent application related to a creature-capturing system.

The Japan Patent Office rejected the application after determining that the claims lacked the required inventive step when compared with previously available material.

One of the pieces of prior art considered by the examiner was a 2013 video showing the unofficial fan game Pokémon: Generations.

Nintendo reportedly argued that the video should not be treated as valid prior art because the game was an unofficial fan project and allegedly infringed Nintendo’s copyright.

The patent office did not accept that argument. The question of whether something infringes copyright is separate from whether the technology or gameplay system demonstrated can be considered when assessing whether a patent is sufficiently inventive.

The decision has attracted considerable attention because of the unusually direct language reportedly used by the Japanese Patent Office when responding to some of Nintendo’s arguments.

Does This Mean Nintendo Has Lost the Palworld Lawsuit?

No.

This is an important distinction.

The rejected patent application is part of a related patent family, but it is not one of the three granted patents currently identified as being at the centre of the court case against Pocketpair.

As a result, the rejection does not automatically invalidate Nintendo’s lawsuit or mean that Pocketpair has won the legal battle.

The patent’s status is also not necessarily final, with Nintendo able to challenge the decision through the relevant review process. The application is currently reported as being under review.

Why Could the Rejection Matter?

Although the rejected application is not the same as the patents being used in the lawsuit, the decision could still be significant.

The dispute is ultimately about whether the patents Nintendo is relying on are valid and whether Palworld infringes them.

A patent office rejecting a related application over a lack of inventive step could give Pocketpair another argument to make as it challenges Nintendo’s claims.

It also highlights the importance of prior art in the case.

A gameplay mechanic does not automatically become patentable simply because it appears in a modern video game. If similar systems were publicly demonstrated or disclosed earlier, those examples can potentially affect whether a patent claim is considered sufficiently inventive.

The case is therefore about much more than whether Palworld looks like Pokémon. It has become a broader dispute over how far patents can extend over gameplay systems that may have appeared in different forms across the games industry.

A 13-Year-Old Fan Game Video Has Become Part of the Story

One of the strangest parts of the latest development is the role played by a 13-year-old video.

The video showed gameplay from the unofficial fan project Pokémon: Generations and was used as evidence of an earlier system relevant to the patent application.

The video has since received renewed attention online, with fans highlighting the bizarre situation of an old fan-made project becoming relevant to a major legal dispute involving Nintendo and one of the biggest survival games in the world.

However, it is important not to overstate what this means. The video being used in the patent examination does not mean the fan game has somehow defeated Nintendo in court.

It simply became part of the evidence considered when examining whether a particular patent application contained an inventive step.

What Happens to Palworld Now?

For now, Palworld continues to operate while the legal dispute remains ongoing.

The latest patent rejection does not automatically remove the lawsuit, and Nintendo still has the opportunity to continue pursuing its claims against Pocketpair.

At the same time, Pocketpair can continue challenging the validity of the patents involved in the dispute.

The situation is likely to remain complicated for some time, particularly as the companies continue their legal arguments in the Tokyo District Court.

The Palworld Lawsuit Is Far From Over

The latest development is certainly a notable setback for Nintendo’s broader patent strategy, but it would be inaccurate to describe it as the company losing its lawsuit against Pocketpair.

The Japan Patent Office has rejected a related patent application, and the decision could provide additional ammunition for arguments surrounding prior art and whether certain gameplay mechanics are sufficiently inventive to receive patent protection.

However, the central court case is still ongoing.

For Palworld players, the immediate situation remains unchanged. The game is still available, and the legal dispute has not resulted in an order shutting down Palworld.

The case does, however, continue to be one of the most important legal battles in the modern games industry. Its eventual outcome could influence how developers think about patents covering gameplay mechanics, particularly in genres where games naturally share ideas such as creature collection, mounts, combat systems and survival mechanics.

For now, the latest chapter has an especially unusual twist: a 13-year-old video of an unofficial Pokémon fan game has become part of a patent dispute that could have consequences far beyond Palworld.

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