Another game company, Konami, is suing Cygames for--in short--having a system where characters compete and can be leveled up.

Plus the concept of "fair use" technically kind of exists legally but not in practice. You sample something and the owner doesn't approve, you're screwed. You don't sample something but simply say something that lowers their reputation, you're screwed (the bar for "libel" is incredibly low--even facts can be successfully tried so long as it can be proven that the intention was to in some way lower a person or particularly a company's reputation). The last one is particularly funny since you'll see the media giving endless praise to a CEO/businessperson and treating them as Jesus 2.0, but the very day they die, the floodgates open and you find out they've committed every crime known to mankind and everyone around them knew it.

Basically, Pocketpair is quite likely heavily screwed. Nintendo can attack them on several fronts and likely will. People saying they made a better Pokemon than Nintendo themselves probably angered a few people within the company and it's easier to take them out legally than to actually compete.