Palworld “infringes multiple patent rights”, Nintendo and The Pokémon Company said in statements posted on their websites, external.
“This lawsuit seeks an injunction against infringement and compensation for damages”.
Palworld has become a major hit, with more than 25 million players within a month of its release.
Like the popular franchise of Pokémon video games, it also centres around collecting strange creatures with different powers.
Pocketpair’s website describes the game as seamlessly integrating “elements of battle, monster-capturing, training, and base building.”
Players, known as “pal-tamers”, travel around a large map battling human foes and creatures known as “pals” which can be captured and recruited.
The monsters can either fight alongside the player in battles, or be put to work at a base, crafting supplies and items for use in the field.
In January, The Pokémon Company said it planned to investigate claims that Palworld had copied its games, after fans pointed out similarities.
The Pokémon Company said at the time it would take “appropriate action” if it found its copyright had been breached.
Pocketpair said in its response to the lawsuit, external on Thursday it would begin taking action on and investigating The Pokémon Company’s claims.
But it added that it was “unaware” of the specific patents that it had been accused of infringing.
“We have not been notified of such details,” it said.
It added that it was “truly unfortunate” that it would need to allocate time and resources to the lawsuit, rather than game development – highlighting its status as a smaller, indie developer.
“However, we will do our utmost for our fans, and to ensure that indie game developers are not hindered or discouraged from pursuing their creative ideas,” it said.