'Sesame Street' makers lose lawsuit over Melissa McCarthy's raunchy 'Happytime Murders'

A judge has offed the court case against Melissa McCarthy’s raunchy movie featuring lots of puppet sex.

The decision comes after Sesame Workshop — the non-profit organization behind popular children’s program Sesame Street — sued the R-rated film’s production company, STX Entertainment, for unspecified damages for its use of the tagline “No Sesame, All Street” in advertising materials for the upcoming film.

Sesame Street‘s suit claimed the phrase “deliberately confuses consumers into mistakenly believing that Sesame is associated with, has allowed, or has even endorsed or produced the movie and tarnishes Sesame’s brand.”

After hearing arguments, U.S. District Judge Vernon Broderick of New York ruled Wednesday that STX can continue to use the tag as Workshop “didn’t demonstrate that moviegoers were confused or that sponsors or parents were complaining,” per the Associated Press.

Directed by Brian Henson — the son of former Sesame Street puppeteer Jim Henson — The Happytime Murders follows Melissa McCarthy as a police officer investigating a series of bizarre slayings in the seedy underworld of puppet crime, where humans coexist with the animated characters. The first trailer for the film, released earlier this month, teases a raunchy ride through an embellished underworld, complete with puppet prostitutes and drug addicts. The trailer for the comedy flick closes as two puppets engage in graphic sex.

“We fluffing love Sesame Street and we’re obviously very pleased that the ruling reinforced what STX’s intention was from the very beginning — to honor the heritage of The Jim Henson Company’s previous award-winning creations while drawing a clear distinction between any Muppets or Sesame Street characters and the new world Brian Henson and team created. We believe we accomplished that with the very straightforward NO SESAME, ALL STREET tagline” STX tweeted Wednesday night through fictional puppet Fred, Esq. “We look forward to continued happytimes as we prepare to release Happytime Murders this summer.”

STX did not immediately respond to EW’s request for additional comment.