mustang ranch dispute

Things are getting a mighty testy in Nevada.  The newest owner of the infamous “Mustang Ranch” building has been barred by a federal judge from using the name.  

The government seized the Mustang Ranch in 1999 after guilty verdicts against its parent companies and manager in a federal fraud and racketeering trial. Bureau of Land Management officials said the government had owned the trademark because it received all Mustang Ranch assets through criminal forfeiture proceedings against Joe Conforte and later owners.

The newest owner allegedly acquired the trademark when he bought the building on eBay from the government in 2003. Unfortunately, a rival brothel owner renamed his brothel the “Mustang Ranch” in 2003. 

Because trademark rights are acquired upon use, the court found (decision in PDF) that the government’s failure to use the mark allowed the mark to become abandoned.  Once abandoned, the first user of the mark acquired all the rights in and to the trademark.

Lesson: be careful when you buy a brothel from the government, you never know what you might getting.