Complex sentence: TSR, Inc. obtained permission from Michael Moorcock for inclusion of the Melnibonéan material (from his "Elric" series of books), and the Cthulhu Mythos was included in the public domain, so TSR assumed they could legally use it without any special permission.
Split into simpler sentences: TSR, Inc. obtained permission from Michael Moorcock for inclusion of the Melnibonéan material (from his "Elric" series of books). The Cthulhu Mythos was believed to be in the public domain, so TSR assumed they could legally use it without any special permission.