Fred, Esq., Fights ‘Sesame Street’ Lawsuit Over Melissa McCarthy Puppet Film

We’re not quite ready to make Fred, Esq., our lawyer of the year, but the puppet certainly had a busy holiday weekend.

For those who haven’t heard, Fred is representing producers of The Happytime Murders, a forthcoming R-rated puppet film that stars Melissa McCarthy. The movie is now the subject of a trademark lawsuit brought by Sesame Workshop, the right-holder to Sesame Street, which complains about the film’s promotion.

According to Sesame’s application for a temporary restraining order, “Defendants’ widely-distributed marketing campaign features a just-released trailer with explicit, profane, drug-using, misogynistic, violent, copulating, and even ejaculating puppets, along with the tagline ‘NO SESAME. ALL STREET.’  Defendants do not own, control or have any right to use the SESAME STREET mark. Instead, they are distributing a trailer that 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.”

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When news of the lawsuit against STX Entertainment spread, Fred stepped forward to make public comment, and, of course, express confidence about the defendants’ legal position. On Tuesday, STX got more explicit in a memorandum opposing a TRO.

“The Application may best be summed up as ‘NO FACTS. ALL ARGUMENT,’” states STX’s memorandum.

One will be hard-pressed to find a trademark dispute where the puppets are at such odds.

While Sesame sees a purposeful bid to seed confusion in the mind of the public, the defendants argue quite the opposite. Emphasis on the phrase, “No Sesame.”

“First, it is readily apparent that the Tagline is not even Plaintiff’s protected ‘SESAME STREET’ mark,” continues the opposition. “Second, to the extent that the Tagline makes use of the elements of the ‘SESAME STREET’ mark, it is not a ‘trademark use’ at all — but rather, as a way to distinguish the Film from Plaintiff’s content. The Tagline is effectively a disclaimer that the Film is not a Sesame Workshop production. Whether considered a descriptive fair use under the Lanham Act or as a ‘nominative fair use’ under Second Circuit law, it is an entirely permissible use, even if it is possible that some consumers might be confused.”

STX, guided by its in-house attorney Fred, explains the background of the film.

What the creative executives behind the movie wished to do was a “pulling back of the curtain” on the puppets that “live” in the universe of The Jim Henson Co.

According to court papers from the producers, “The Film was not conceived as just a raunchy version of the Henson Company puppet family, but rather, as a never-before-seen glimpse into their private lives, when children are not around. … There was never any intention to use or copy existing puppets from either Sesame Street or The Muppets, but rather, to create entirely new puppets that would clearly reflect by their look, feel and mannerisms that they came from the world of Henson Company and its large family of puppets.”

The Happytime Murders has some similarities to Who Framed Roger Rabbit, a mix of live action with surreal elements that focuses on a crime mystery. McCarthy plays a disgraced LAPD detective turned private investigator who investigates the murder of puppets cast on an ’80s children’s TV show.

The film is directed by Brian Henson — the son of Jim Henson and the chairman of The Jim Henson Co. He is said to have responded favorably to the tagline, thinking it was funny and fine to use.

In its TRO application, Sesame Workshop asserts that the connection with Jim Henson — who originally created the Muppets — actually works as a point in favor of finding potential confusion.

The defendants argue that Sesame hasn’t demonstrated why a New York federal court holds personal jurisdiction over STX, and regardless, that Sesame can’t demonstrate a likelihood of prevailing on its claims for a host of reasons including how Sesame Street and The Happytime Murders are geared to different audiences — the former, children; the latter, adults — and there’s no bad faith.

“Plaintiff cannot point to any conduct or statements by STX, other than the fact that the Tagline appears in the Trailer, as evidence of STX’s bad faith,” states the opposition brief. “By contrast, the Chairman of STX Films, Adam Fogelson, has testified that when STX came up with the Tagline, it believed that it was a humorous, pithy way of letting viewers know that the Film was not a Sesame Street production; that it was, in fact, very different than a Sesame Street production; and that the Tagline would succinctly and cleverly distinguish the Film from Sesame Street productions. It did not occur to STX that a viewer would see and hear ‘NO SESAME’ and think ‘YES SESAME.’”

Below is the full brief, and despite any misleading indication that it was handled by Fred, Esq., himself, the real credit goes to David Halberstadter and David Goldberg at Katten Muchin Rosenman.

May 30, 4:29 p.m.: STX has successfully dodged the TRO. According to AP, the judge heard oral arguments and issued a ruling in favor of the defendant. The judge reportedly said Sesame hadn’t demonstrated that moviegoers were confused.

May 30, 5:02 p.m.: In a statement after the ruling on Wednesday, Fred, Esq. said on behalf of STX Entertainment, “We fluffing love Sesame Street and we’re obviously very pleased that the ruling reinforced what STX’s intention was from the 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 this with the very straightforward NO SESAME, ALL STREET tagline. We look forward to continued happytimes as we prepare to release Happytime Murders this summer.”

June 1, 5:05 p.m.: The case is officially over. Sesame has dropped their claims.