There are many games that had that mechanic before Arceus.
In particular, Craftopia (which is from the same developers of Palworld) had capsule devices that you can throw to enemies in a “virtual space” while characters “engage in combat” before Arceus was a thing.
Just because they wrote a patent does not make it enforceable… patents don’t really mean anything until they are actually tested in court so they are just tools to try and scare people away whenever a company wants to bully with the prospect of a lawsuit.
I feel that Palworld is likely to win this, this actually is an idiotic move from Nintendo and a win for Palworld… now they will get more publicity, perhaps another spike in sales, and they are finally given the opportunity to prove how they are in the right, so they can shut up all the naysayers who complained about it. I’m hoping all the paranoic empty claims about “blatant asset theft” will be settled once and for all.