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The Pokemon Company releases a statement regarding Palworld: Inquiries Regarding Other Companies’ Games
(corporate.pokemon.co.jp)
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The idea of a Pokémon clone isn't protectable, but existing Pokémon are.
You can make a Pokémon clone with entirely novel monsters, but if a judge thinks they look too much like an existing Pokémon they're gonna have a problem.
That's really the issue. The creatures in the game, as I've seen pointed out in various places, are much closer in design to actual pokemon designs than in other poke-clone games, with some looking so close they might as well just be a regional form. I don't even know any of the pals' names but I can somewhat clearly recall seeing one that's basically "Luxray at home". I know the maker of the game has said he doesn't really value originality, but there's a difference between being unoriginal and straight-up plagiarism.
I see it. "Electabuzz at home" wielding a mini-gun is all over the marketing I've seen.
They're similar because they're based on the same real-world animals. And they're no more similar to Pokemon than the examples of Pokemon ripping off designs from Dragon Quest
It's very much not just "same animals" but parts of Pals looking like they were traced or at least copied visually from existing Pokemon, as well many Pals directly copying color schemes from similar Pokemon.
I've played a fair number of pokemon games. There are a lot of Pals that I thought I recognized as pokemon.
To be fair, I don't think there's anything wrong with using Pokemon as inspiration, and even when not the fact that Pokemon is so ubiquitous means that comparisons will be drawn regardless. But there's definitely more than a few Pals that seem to cross from inspiration to a suspicious amount of copying, and it's more about wanting to support artistic integrity than it is about Pokemon specifically.