(R) Characters from Sesame Street Live celebrate the 30th anniversary of the live touring stage shows Feb. 4, 2010. (AP Photo/Kathy Willens); (L) Melissa McCarthy arrives at CinemaCon 2018 in Las Vegas. (Chris Pizzello/Invision/AP)
By Lindsay Benson, Kwegyirba Croffie and Paul P. Murphy CNN
(CNN) -- The company behind "Sesame Street" has lost its lawsuit against the makers of Melissa McCarthy's upcoming raunchy comedy, "The Happytime Murders," for referencing the popular kids show in its marketing campaign.
A New York judge ruled Wednesday that Sesame Workshop failed to demonstrate the movie's marketing tagline -- "No Sesame. All Street." -- might confuse moviegoers.
The R-rated film follows "two clashing detectives" -- Melissa McCarthy and her partner, a puppet named Phil Phillips -- in Los Angeles as they work together "to solve the brutal murders of the former cast of a beloved classic puppet television show," according to its website.
Sesame Workship, the educational organization behind "Sesame Street," had sued over the tagline, which is used in the film's marketing campaign, including its trailer.
The lawsuit argued that STX Entertainment does not have the right to use "Sesame Street" in its tagline.
"[The tagline] 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," the lawsuit said.
"The Happytime Murders" is directed by Brian Henson, son of former "Sesame Street" puppeteer Jim Henson, creator of the Muppets.
A spokesperson for STX Entertainment told CNN they were pleased with the ruling.
"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," STX said in a statement.
CNN has reached out to Sesame Workshop for comment, but has not yet heard back.
In 2015, Sesame Workshop and HBO signed a five-year partnership for new episodes of "Sesame Street" to air on the cable channel. CNN and HBO are both owned by Turner Broadcasting.
"The Happytime Murders" is set to hit theaters on August 17.