Today we cover an interesting YouTube that sheds light on the Pokémon vs. Palworld lawsuit, in a way that wasn’t adequately explained by even other English language media outlets that cover Japan.
Moon Channel made a video that explains that the differences between IP law in the US and Japan have created a somewhat misleading picture about the lawsuit that The Pokémon Company announced two months ago. We’ll try to summarize the salient points below.
As it turns out, the copyright system in the US that we took for granted applies worldwide isn’t actually the same one in Japan. Without going into details, the US system is broken, such that copyright holders have to aggressively go after anyone else using their characters and trademarks, and that made it necessary for that system to have different definitions for parody and satire.
In contrast, the Japanese laws have very strict and clearly defined rules for what is and is not protected by copyright. It may seem ironic, but because of this, many Japanese fans are free to make doujinshi, or fanworks, that extend beyond just online fanfiction, to making comics, merchandise, even toys and video games using characters owned by other companies.
And how does that make sense? Well, because it’s clear that a company owns a copyright on a character, like, say, Hatsune Miku, the company that owns the character doesn’t have to go to court every time a fan makes something with her. They aren’t afraid they’ll lose their rights to Miku.
Another big difference involves patents. We didn’t realize this here in the West, but big Japanese companies, including Nintendo, Sony, Studio Ghibli, Sharp, and others, apply for dozens of patents, for things you may not feel they should have the right to do so. But just like copyright, they don’t actually go around suing others who use their patents all the time.
That’s because patent litigation is costly, and there’s a huge risk that they can lose their patents if the lawsuits don’t go their way. So these companies aren’t exactly arming themselves to be patent trolls, the way companies would in the West. Bringing a patent lawsuit in Japan is like clumsily wielding a knife around.
So, The Pokémon Company is actually risking losing patents, and money, by announcing they were bringing this lawsuit to Palworld. The reason they’re doing it is something we reported all the way back in July – developer Pocketpair formed a new joint venture with Sony, which is essentially the same deal Game Freak entered into with Nintendo to make The Pokémon Company.
Nintendo’s real enemy here is Sony. Sony decided to make Palworld a thing, promising a Palworld anime, Palworld music albums, and even launching Palworld merchandise. By doing so, Sony intends to hurt the Pokémon trademarks in Japan.
So this may not really even affect affairs in the rest of the world. But by creating trademark confusion, Sony can undermine Nintendo’s market position, and the value of Pokémon itself.
And if one remembers that Pokémon is worth more than the Marvel Cinematic Universe, one understands why Nintendo is willing to risk losing their patents. The very different ways copyright laws work in Japan, incentivizes Nintendo not to put their actual Pokémon trademark on the line, since that’s even worth more than the patents.
And Moon Channel argues it doesn’t even really matter what patents they use, since in this scenario, the patents are something of a dangerous weapon they wield, and not the actual things they’re trying to protect.
You may not have realized it when we reported it then, but this explains why a lot of smaller Japanese developers, such as Touhou Project’s ZUN, disowned Pocketpair. When Pocketpair said they were fighting for indie studios, they knew that Pocketpair was not only making millions already, but they just made an even bigger deal with Sony.
Those smaller devs had a more positive impression of Nintendo not necessarily because they were Nintendo and Pokémon fans. Nintendo is well regarded as a company that made Japan popular, but they are also really tolerant of Pokémon fan works.
It’s certainly a topsy turvy relationship compared to how Nintendo deals with fan works in the US, but once again, this is what every IP owner has to do in this country, because of the messy and disorganized state of US copyright law.
If you thought Nintendo took nine months to bring this lawsuit, that might have been wrong too. While Nintendo did make a statement all the way back in January, Pocketpair made their deal with Sony in July. So Nintendo really took two months to announce the lawsuit from when that deal was announced.
None of this, of course, changes the potential merits of the case, and we may find ourselves switching sides between the two when the case finally plays out in court. But this was definitely the context we didn’t know was necessary to understand how this situation was playing out in Japan.
Moon Channel’s whole video is worth watching, so if you do have the hour, you can watch it below.
