There's no doubt any pre-school kiddies stumbling across The Happytime Murders when it opens in the US on August 17 (and Australia a week later) are in for a shock, what with bloody murders, a profusion of F-words and the rather unedifying sight of a puppet private eye ejaculating (and then some) all over his office after having sex with a (puppet) client. But the responsibility for any psychological damage would surely lie with the parents or guardians who had taken the little tackers there, rather than the makers or distributors of the film.

It is hard not to conclude that a big part of the reason for the lawsuit in the first place was the identity of the filmmakers: the Jim Henson Company, the original creators of the puppets for Sesame Street and The Muppets.

Though it was CTW which put the creatures to air on PBS with Sesame Street in 1969, it was Jim Henson who created them and owned the copyright in them.

Following Henson's death in 1990, a series of complicated and rather lucrative deals have seen the company sold by the Henson family (for $US680 million in 2000) and then bought back again three years later (for $US84 million).

In separate deals the rights to the Sesame Street characters were sold to Sesame Workshop in 2000 for $US180 million, while the Muppet characters and brand were purchased by Disney for an undisclosed figure that has been reported as likely around the $US200 million mark. (Kermit the frog, whose creation pre-dated Sesame Street by more than a decade, is now owned by Disney, but licensed to Sesame Workshop for use in its long-running children's program.)

Meanwhile, the Henson Company, which is headed by Jim's son Brian (who directed a couple of Muppets movies in the pre-Disney era), has continued to develop and produce content through a number of streams, including Henson Alternative, the adult-oriented arm responsible for The Happytime Murders.

The new movie is far from the first time a group of filmmakers have seen the comic potential in putting very adult language in the mouths of puppet-marionettes, or in probing what goes on in Muppetland after the children have gone to bed.

Meet the Feebles (1989), from Lord of the Rings director Peter Jackson, was a behind-the-scenes look at a variety show where interspecies sex, drugs and rock'n'roll ruled – at least until a jilted ex took revenge with a machinegun.

The Broadway musical Avenue Q explored more realistic adult themes with puppets and performers side-by-side on stage.

In fact, Jim Henson himself saw the potential in the idea. Saturday Night Live's first season in 1975 featured a bunch of stoner Muppets singing with Lily Tomlin, and the pilot episode of The Muppet Show itself (also 1975) was titled Sex and Violence, though it didn't feature much of either.

More recently, the Henson Company has produced four seasons of a parody panel show, No, You Shut Up, in which human host Paul F. Tompkins is joined by a variety of occasionally furry and foul-mouthed guests.

In other words, the marionette-puppet hybrids first unleashed on the world by Jim Henson in 1955 have been Street for way longer than they've been Sesame.

Thanks to this legal ruling, they will happily be allowed to stay that way for a good deal longer.