Words that are underlined link to explanations in our IP Lingo dictionary unless the underlined passages explicitly refer to other articles.
Context:
- Nintendo is accusing Palworld maker Pocketpair in Japan of having infringed three patents. The litigation may be motivated by Nintendo’s desire to position itself as more creative and innovative while actually imitating Palworld (October 14, 2025 games fray article). Last week, we were first to report that the Japan Patent Office (JPO) has rejected (on a non-final basis) a patent application by Nintendo, citing games like ARK as prior art (October 29, 2025 games fray article). That rejected application is central to the patent family from which two of Nintendo’s three Japanese patents-in-suit hail.
- Two months ago, we were first to criticize a decision by a patent examiner at the United States Patent and Trademark Office (USPTO) to grant Nintendo a patent on summoning a subcharacter and letting it fight in one of two battle modes (September 9, 2025 games fray article).
What’s new: In a stunning development attributable to the public outrage that started here on games fray and reflecting concern over implications for the reputation of the U.S. patent system as a whole, USPTO Director John A. Squires has personally ordered, at his own initiative, his organization to take another look at Nintendo’s U.S. Patent No. 12,403,397. The Director determined that ex parte reexamination was in order because of two older published U.S. patent applications, one of which was filed by Konami in 2002 and the other by Nintendo itself in 2019 (it was published in 2020). Either one of those prior art references “teaches a player being allowed to peform a battle in a manual mode and in a simpler, automatic mode.” This may be the first such order in more than a decade (we’ll discuss that further below).
Direct impact: A reexamination order is not a revocation order (which would not be possible in this form anyway), and even Director-initiated reexaminations can result in a patent being upheld, but it is highly likely that the USPTO will revoke Nintendo’s ‘397 patent. The two prior art references underlying the “Director Initiated Order for Ex Parte Reexamination” (that’s the official title) address the element based on which the original examiner thought Nintendo’s patent was distinguishable from the prior art. Nintendo has two months to respond to the order, and if any third parties wish to up the ante for Nintendo further (though it does not appear necessary), they can bring their own challenges and present, for example, prior art relating to games rather than patent documents.
Wider ramifications:
- This development further undermines the credibility of Nintendo’s patent assertions against Palworld. This is now the second case in as many weeks where a patent or patent application related to the patents Nintendo is asserting against Palworld is viewed skeptically by one of the world’s top four patent offices (the other members of that club are the European Patent Office (EPO) and the China National Intellectual Property Administration (CNIPA), and we are not aware of any major events relating to Nintendo patents in those jurisdictions).
- The last confirmed Director Inititiated Order of an Ex Parte Reexamination was in 2012. The all-time number of such orders technically changed in 2019, but based on our research that fact was due to a change in counting methods.
- The only plausible explanation is that the USPTO’s leadership became aware of all the negative publicity surrounding the grant of the ‘397 patent and wanted to correct this mistake. No system is perfect, which is why there must be processes in place to fix issues. That is what the USPTO is demonstrating.
- What makes this initiative even more remarkable is the fact that since Director Squires was appointed by President Donald Trump and confirmed by the United States Senate, all of his other measures made it harder to challenge patents (October 16, 2025 ip fray article; October 1, 2025 ip fray article). The first time he intervened with respect to a particular patent, he actually revived a canceled patent (October 5, 2025 ip fray article), declaring expert testimony unreliable.
This order by Director Squires is good news for the U.S. patent system and for that small company named Pocketpair that is forced to defend against Nintendo’s patent assertions. By extension, it validates games fray‘s concerns over the grant of this patent and the criticism voiced by others who subsequently voiced similar opinions.
Director Squires’s order is dated November 3, 2025 (Monday).
It relates to claims 1, 13, 25 and 26 of the patent. Those are the only independent claims. If they fall, which we believe will most likely happen, the remaining ones (which depend on those claims) will fall as well. This is a house of cards.
Normally, ex parte reexaminations result from a petition by a company that has to defend against a patent, has been threatened, or anticipates litigation. Here, however, there was no other company involved. The USPTO Director himself took the initiative.
If Nintendo sued anyone over that patent right now in a United States District Court, it is a given that the court would stay the proceedings pending the outcome of the reexamination.
In his Senate confirmation hearing Director Squires was asked about his criticism of the high rate of invalidation of granted U.S. patents in subsequent proceedings. He then made it clear that he wanted U.S. patents to be “born strong” so they have value. On the one hand, this means that he does not want strong patents to be wrongly invalidated just because of serial challenges. In a recent document, the USPTO explained that if a patent is valid in the opinion of 70% of those looking at it, it is objectively strong, but if it gets challenged over and over again, there will eventually be a panel that has the minority (30%) view. At the same time, Director Squires’s order to have Nintendo’s ‘397 patent reexamined shows that he wants to weed out objectively bad patents.
To be clear, Nintendo does obtain patents on genuine technical inventions, which are typically hardware patents. But it has also sought to abuse the patent system by monopolizing game rules.
Nintendo regularly has to try to invalidate other companies’ patents. For example, on December 2 and 3, 2025 the Unified Patent Court’s (UPC) Hamburg Local Division (LD) will hear two cases brought by a licensing firm over former BlackBerry patents. As the following screenshot shows, Nintendo brought revocation counterclaims against both of those patents:
Here’s Director Squires’s order that dooms Nintendo’s ‘397 patent:
Here are the two prior art references cited in the order. First, the 2002 Konami patent application (it was filed in Japan in 2001, then in the U.S. in 2002, and published in 2002 when the original Japanese application was 18 months old):
It is ironic, or one might even say that it adds insult to injury, that the second prior art reference is one of Nintendo’s own earlier patent applications (filed in 2019, published in 2020):
This is not the first time for a fray article to have led to procedural decisions. Last month, Mr Justice Richard Meade of the High Court of Justice for England & Wales summoned Amazon and publicly-traded U.S. research and licensing firm InterDigital to a hearing after reading about a foreign decision on ip fray (October 14, 2025 ip fray article), and at a subsequent UK hearing counsel for Amazon said that Presiding Judge Professor Dr. Peter Tochtermann of the Unified Patent Court’s Mannheim Local Division ordered the parties to comment on another ip fray report (item 5 of an October 30, 2025 ip fray article).
It is a feature of the patent system that applicants have to face their own prior publications as prior art. Now, some of you may (still) be asking yourselves why Nintendo then filed patent applications after Palworld’s release on Palworld game rules. We explained that in the first part of an “explain it to me like I’m five” article series on the case (January 23, 2025 games fray article). The difference between the 2019 Nintendo application and the patents they are using against Palworld is that all of the patents-in-suit claim back priority to December 2021, which is lawful provided that the original application sufficiently disclosed what later-sought patent claims cover. But the relevant applications, including the one that led to the ‘397 patent, do not claim back priority to Nintendo’s December 12, 2019 application shown above.
In any event, there’s also that Konami patent application that is more than 20 years old…
The order explicitly refers to the distinction between a main (player) and a subcharacter. An academic quoted by a tech news website proposed StarCraft as prior art, but at least the original StarCraft does not show that distinction: a player controls an army of units, but there is no particular player character who spawns subcharacters that will then engage in manual or automatic battle (item 2 of our September 20, 2025 article).
There may not be any further developments this calendar year relating to Nintendo’s lawsuit against Pocketpair or patents that are somewhat related to it. In 2026, however, some decisions will come down, particularly by Presiding Judge Motoyuki Nakashima who leads a patent division of the Tokyo District Court. It is ever more likely that Nintendo will lose.