
Palworld's merchandise could face potential legal risks if it is found to infringe on the intellectual property rights of Pokémon. This could happen if the designs of Palworld's creatures are deemed too similar to Pokémon, leading to possible accusations of copyright infringement. Despite this, Palworld remains popular and has expanded to include merchandise, suggesting that the developers are confident in their legal position.

Palworld is often described as mimicking Pokémon, particularly in its creature design. The game has been noted for its resemblance to the popular Nintendo franchise, both in terms of the appearance of its creatures and the concept of capturing and battling with them.

Nintendo has responded to Palworld's mimicry by reiterating its stance against those who infringe their intellectual property rights3. While the company has not taken any direct action against Palworld, it has swiftly dealt with related issues, such as taking down the first Palworld Pokemon mod.