Needham Harper & Steers, an ad agency (now known as the Omnicom Group) vying for McDonald's advertising accounts had originally hoped Sid and Marty Krofft, the creators of H.R. Pufnstuf, would agree to license their characters for commercial promotions. After the McDonaldland promotion went forward, the Kroffts were dismissed without being credited or paid.[2]
In 1973, the Kroffts successfully sued McDonald's, arguing that the entire McDonaldland premise was essentially a ripoff of their television show. Specifically, the Kroffts claimed that the character Mayor McCheese was a direct ripoff of their character, "H.R. Pufnstuf" (a mayor himself). McDonald's initially was ordered to pay $50,000. The case was later remanded as to damages, and McDonald's was ordered to pay the Kroffts more than $1,000,000 when the case was finally settled in 1977. As a result of the lawsuit, the concept of the "magical place" was all but phased out of the commercials, as were many of the original characters.
