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Jessica Barth (stars as Tami-Lynn) and Ted in Universal Pictures' Ted 2 (2015)

The makers of a web series featuring a foul-mouthed, chain-smoking teddy bear have dropped a lawsuit that claimed Seth MacFarlane stole their idea for his hit comedy Ted.

California-based Bengal Mangle Productions had claimed copyright infringement over the character Charlie the Abusive Teddy Bear, who appeared in a series of web shorts titled Acting School Academy. Like Ted, Charlie lives in a “human, adult world with all human friends ... has a penchant for drinking, smoking, prostitutes, and is a generally vulgar yet humorous character,” read the company’s initial complaint.

Ted was one of the most profitable movies of 2012, taking $549 million (Dh2 billion) worldwide on a budget of just $50 million.

However, Deadline reports that Bengal Mangle is unlikely to have received any form of financial settlement after both sides agreed to dismiss the case. “The parties hereby stipulate and agree... that this action, and Plaintiff’s Complaint for Copyright Infringement, shall be dismissed in its entirety with prejudice, each side to bear its own costs and attorneys’ fees,” reads a newly published court statement. Defendant Media Rights Capital (MRC) added: “The plaintiff has conceded that the Ted character was independently created by Seth MacFarlane using his own efforts and creativity.”

The company said MacFarlane was now looking forward to the release of sequel Ted 2, in which the comic will reprise his role as voice talent for the CGI teddy bear alongside Mark Wahlberg as his lifelong human pal, John Bennett. Amanda Seyfried plays Bennett’s new girlfriend in the follow-up, replacing the original film’s Mila Kunis.

Ted 2 is due in US cinemas on June 26 and is scheduled for UAE release on July 30. The storyline for the sequel sees the potty-mouthed bear forced to prove in a court of law that he is a person, so that he and his wife can have a child.