I doubt they can unless Palworld literally stole models from Pokemon. While some of the designs are pretty blatantly copied, if they can't prove the devs copied directly from them there's not much of a case
I thought all of the IP was controlled by The Pokemon Company, which Nintendo owns a minority stake in. Shouldn't it be the Pokemon Company who is filing the DMCA takedown and taking legal action?
Yeah no shit, though. Nintendo is excessive as hell with this, and Pokémon in particular is a franchise they protect like nothing else. Is it still the highest-grossing IP overall? No wonder they are onto anyone using it.
Nintendo really is the Disney of video games. They had a solid idee 20 years ago and never did anything with it, except add more animals, because they know people apparently buy literally anything with a Pokémon on it. And now they are mad some nobody made a game people actually like.
Someone made a mod using actual pokemon and put it behind a paywall, meaning they were making money off of Nintendo's IP. Anyone would get into legal trouble for that. It doesn't have anything to do with Palworld directly. Same thing would have happened if someone charged money for a mod that added Pokemon to Fallout 4.