A Nevada whorehouse bearing the hallowed Mustang Ranch name is back in business after a judge ended a three-year trademark battle between two rival brothel owners.

U.S. District Judge Edward C. Reed ruled that the operator of the Wild Horse Adult Resort & Spa assumed ownership of the Mustang Ranch mark when he bought the brothel's garish pink stucco buildings at a government auction for $145,000 in October 2003. Lance Gilman has spent another $3.5 million renovating and upgrading the facilities.

“It's euphoria to have the most famous brothel name in the world,” Gilman said. “The Mustang Ranch rides on."

Gilman prevailed in a bench trial of a preemptive suit filed by competitor David Burgess, who claimed to have obtained a license from an Idaho accountant for the exclusive use of "Mustang Ranch as a service mark for legal prostitution services."

The key issue in the case was whether the federal government abandoned the mark during the four years of nonuse that followed the seizure of the Mustang Ranch in 1999. “Defendant acquired no goodwill and no rights in the trademark of the business,” Burgess argued in a trial brief.

Another judge in 2005 enjoined Gilman from using the mark, finding Burgess was "likely to succeed on the merits in proving abandonment.” Gilman, who had moved the Mustang Ranch buildings to a site near the Wild Horse, operated his new asset under the generic World Famous Brothel name.

But Reed was more receptive to the defense case. The period of nonuse, he said in denying Burgess summary judgment earlier this year, could reflect the efforts of a "slow-moving" bureaucracy to assess the assets,

and ultimately sell the mark and its goodwill to a party who did intend to use the mark for brothel services as soon as it was able to relocate the property.

After Reed's trial judgment, Gilman quickly posted a sign displaying the Mustang Ranch name and logo alongside Interstate 80 near Reno. Burgess, who once managed the brothel for original owner Joe Conforte, was left to mourn the demise of a dream.

“The Mustang Ranch was our family history,” his wife Ingrid Burgess said. “We wanted the tradition to carry on.”

By Matthew Heller
12/22/06