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Rhonin the wizard said:

Nintendo, alongside The Pokémon Company, has filled a lawsuit against Pocketpair. It seeks an injunction and compensation for alleged patent rights infringements with the videogame Palworld. 

https://www.nintendo.co.jp/corporate/release/en/2024/240919.html

I am not that shocked. What surprises me is that they went with patent infringement. I think they would have a stronger case for copyright violation.

Personally I think Nintendo will struggle with this one.  Pal plays way different and has a lot of survival elements.  It plays completely different.