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this post was submitted on 19 Sep 2024
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So no one really knows what exactly Nintendo is accusing them of yet.
Here's an older video by an attorney that did a deep dive on Palworld and its legality: https://www.youtube.com/watch?v=ns3ATH556NU (Warning: long video).
Edit - Update:
A patent lawyer Was able to narrow down which patent that they could allege was infringed by looking at the combined patents between Nintendo and The Pokémon Company (since they filed a joint lawsuit). There are 28 possibilites and they are claiming that multiple patents have been infringed. https://gamerant.com/nintendo-pokemon-palworld-pocketpair-lawsuit-which-patent/
One likely candidate is a patent that was filed (and requested that the review process be expedited) in July of 2024 that's "primarily centered on creature-catching mechanics".
Nintendo is suing them over patent infringement, not copyrights, which is whats making everyone confused. Everyone was expecting Palworld to get sued over copyright, under the assumption that the pals kinda look similar to Pokemon. Instead, theyre getting sued for gameplay mechanics.