One of the claims by Sesame Workshop is dilution. I have written about dilution before here. Generally, dilution is defined as the lessening of the capacity of a famous mark (the mark must be "famous" in order to earn protection against dilution) to identify and distinguish its goods. It involves two types of unauthorized use: Blurring and Tarnishment. Blurring is the whittling away of an established trademark's selling power through its unauthorized use upon similar products. Tarnishment is the linking of a mark to products of an inferior quality or when the mark is portrayed in an unwholesome or embarrassing context.
For a refresher on trademark basics go here.