Further, the lawsuit contends the "Sesame Street" brand will be harmed by a just-released movie trailer featuring "explicit, profane, drug-using, misogynistic, violent, copulating and even ejaculating puppets" along with the tagline "NO SESAME".
Sesame Street has brought joy to young children for decades, and can teach them all kinds of valuable lessons, from letters and numbers to how to be nice to others.
The Happytime Murders sees Melissa play a cop, who along with her puppet partner investigates when someone starts killing off the stars of a former hit TV show.
Henson died in 1990 at age 53.
A judge Friday scheduled a hearing next week to consider a request for immediate relief by Sesame Workshop, which sued Thursday in federal court for unspecified damages.
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'Defendants threaten to inflict serious, irreparable damage to Sesame's mark and brand by associating their adult movie with Sesame Street'.
"We're incredibly pleased with the early reaction to the film and how well the trailer has been received by its intended audience".
Sesame Workshop says that although the trailer for the movie is "indescribably crude", it is not seeking to block the film's promotion.
It continued: "While we're disappointed that Sesame Street does not share in the fun, we are confident in our legal position".
"The Happytime Murders", scheduled for an August 17 release, is directed by Brian Henson, the son of "The Muppet Show" creator Jim Henson who also helped develop the puppet characters of "Sesame Street" when it launched in 1969.
Jim Henson, whose production company was taken over by his children on his death in 1990, created numerous Muppets used in Sesame Street but the rights to the puppets were sold to Sesame Workshop in 2000. We take no issue with the creative freedom of the filmmakers and their right to make and promote this movie, rather this is about how our name is being misused to market a film with which we have no association.
The lawsuit says this tarnishes the Sesame Street brand and confuses people into thinking the two are linked.