U.S. Patent Office Boss Orders Reexamination of Nintendo's Controversial 'Summon Character and Let It Fight' Pokémon Patent, Which IP Lawyer Claims 'Further Undermines Credibility' of Its Case Against Palworld

The U.S. Patent and Trademark Office (USPTO) Director has ordered a reexamination of Nintendo's controversial 'summon character and let it fight' patent, citing substantial new questions of patentability and prior art, which significantly undermines Nintendo's legal standing against Pocketpair's Palworld. This development, coupled with a prior rejection of a related monster-capture patent by the Japan Patent Office due to lack of originality, makes it highly probable the USPTO will revoke the patent and increases the likelihood of Nintendo losing its broader infringement lawsuit, potentially impacting its intellectual property enforcement and competitive strategy.

Analysis

The United States Patent and Trademark Office (USPTO) Director has ordered a reexamination of Nintendo's '397 patent, which covers "summon character and let it fight" mechanics, citing "substantial new questions of patentability." This decision follows criticism from IP experts and references two older U.S. patent applications from Konami (2002) and Nintendo itself (2019) as prior art, which are deemed "important in deciding whether the claims are patentable." IP expert Florian Mueller suggests it is "highly likely" the USPTO will revoke the patent.

This development significantly undermines Nintendo's legal standing in its ongoing litigation against Pocketpair's Palworld. It follows a recent rejection by the Japan Patent Office (JPO) of a related Nintendo monster capture patent for lacking originality, with the JPO citing older games like ARK (2015) and Monster Hunter 4 (2013) as prior art. These JPO-rejected patents were filed in 2024, derived from 2021 patents, seemingly in response to Palworld's emergence.

The cumulative effect of these patent challenges, particularly the USPTO reexamination, "further undermines the credibility" of Nintendo's infringement assertions against Palworld. With decisions anticipated next year, Mueller predicts it is "ever more likely that Nintendo will lose" its broader lawsuit. This signals a potentially negative outcome for Nintendo's intellectual property enforcement strategy, reflected in the strongly negative sentiment and moderate market impact score.

Key Decisions for Investors

• Investors should closely monitor the USPTO reexamination outcome and the Tokyo District Court's decision next year, as a loss for Nintendo could signal broader challenges to its intellectual property enforcement strategy and competitive moat.
• Evaluate Nintendo's valuation considering increased legal risks and potential erosion of its ability to exclusively protect core game mechanics that may be deemed non-patentable.
• Assess the implications for the broader gaming industry, as this case could set precedents for intellectual property protection of common gameplay elements, potentially fostering more competition in established genres.