Residents of Leisure World in Silver Spring might be forced to abandon the long-standing name of the "active adult" community and its landmark steel globe if they aren't willing to pay for the right to use them.
Leisure World has been a Montgomery County fixture for 44 years, and its 8,500 residents are considered one of Maryland's most potent political forces.
But the daughter of Leisure World's developer says her company owns the trademark to the globe and name. After providing more than 40 years of free use, the company needs to protect its rights to the brand, which earns fees from real estate agents around the country who advertise themselves as "Leisure World specialists," she says.
Now the Leisure World board of directors is surveying residents to determine whether they want to pay a licensing fee or choose a new name. Both options would cost the community money, a recent letter to residents said, including $35,000 already spent in legal fees.
"We have a 45-year investment in the name," said Marian Altman, 65, chairwoman of Leisure World's board of directors.
Sure, she's heard the jokes about "Seizure World." Still, Altman said, "It's known across the state, especially with the politicians. … In Annapolis, they know Leisure World votes."
If the board doesn't agree to pay, "they wouldn't be able to be a Leisure World community anymore. They'll have to rename themselves," said Heidi Cortese, the daughter of Leisure World's initial developer, Ross Cortese, who died in 1991. She said she has asked a Leisure World in California, and plans to ask another in Arizona, to sign the same agreement acknowledging her company's trademark rights.
The topic has kicked off quite a controversy at the 610-acre community off Georgia Avenue, where residents must be 55 or older.
When the subject came up recently at a Leisure World Comedy and Humor Club meeting, there was no shortage of outrage.
"They all said, 'To hell with them — let's change it!'" said Roy Rosfeld, 86, a retired tax lawyer and the club's president, as he shopped at the nearby Giant last week wearing a "World War II Veteran" ball cap. "That seems to be the flavor at this moment: If we have to pay for it, tell 'em to stuff it. We'll get some fancy new name."
The name debate began quietly in late 2009, when Cortese notified the Leisure World board that her California-based company, RRLH, holds the trademark to the Leisure World name. Federal records show RRLH holds the 1966 trademark registrations for the Leisure World name and globe design for "retirement community development and operation."
Cortese said she initially told the board that the community would have to pay $6,000 per month to continue using the name and globe. She has since lowered the amount to $1 annually for 30 years, saying her company needs to charge licensing fees or risk losing the trademark protection.
The board rejected the $6,000 monthly fee and has not taken a position on the $1 offer, Altman said. However, the seven-page licensing agreement that Cortese offered included "constraints that could be expensive" for the community, according to a board committee flier slipped under residents' doors.
Cortese said she doesn't know of any constraints in the agreement.
The Leisure World name appears on the community's website, main boulevard, garbage trucks, staff uniforms and its twice-monthly newspaper. It's also used by 75 clubs and 29 homeowner groups. Trying to enforce the licensing agreement would be impossible, Altman said.
"If we even pay her a dollar a year, and she thinks we violated [it], she could take us to court," Altman said.
Besides, Altman said, Cortese's trademarks are limited to real estate sales, and the community isn't selling property. Signing any licensing agreement, she said, would wrongly acknowledge that Cortese's company owns the name for non-real-estate purposes.
Cortese, chief executive of RRLH, said her concern is protecting the trademark rights in real estate marketing. However, she said, residents benefit from the "cachet" of the Leisure World brand because its reputation for "high-quality, active adult communities" bolsters their property values.
Licensing fees, she said, are necessary to maintain the "integrity" of the Leisure World brand, because she intends to develop more communities.
RRLH's primary business is charging licensing fees to protect the trademarks, Cortese said. She is also chief executive of Rossmoor Construction, which developed Leisure World Maryland and six other "active adult" communities around the country, including Leisure World Virginia in Loudoun County. Her companies have no role in the communities after they are developed, she said.
Cortese said she decided to begin pursuing fees after she realized the Leisure World name was being used frequently on the Internet without permission. She didn't ask for payment from Leisure World Maryland until recently, she said, because her development company had been earning money off new-home sales there. When building at the community ended late last year, she said, she decided she needed to protect the brand for resales of Leisure World homes.
Leisure World Virginia does not pay a licensing fee, but Cortese's company receives a percentage of each new unit's sales price because they are marketed under the Leisure World name, Cortese said. She said she extended the same $1-per-year offer to Leisure World Seal Beach in California in the past 12 to 18 months but hasn't heard whether that community will pay. Dan Schaeffer, an administrator at the Seal Beach community, said he could not comment because the matter is pending. Cortese said she plans to approach Leisure World Arizona with a similar offer next year.
Real estate agents who use the Leisure World name on their websites or advertise themselves as a "Leisure World specialist" must pay her company $100 per month, she said.
Cortese said she won't pursue licensing fees from the adjacent Leisure World Plaza shopping center in Silver Spring, which also has a globe on its sign, because it's not a real estate sales business.
She said she initially sought to charge $6,000 monthly because she had been told that an independent real estate company with offices inside the Leisure World gates had been paying its rent to the community as a portion of its revenues. She said she calculated that the community, because of that rent, was making about $6,000 per month off sales that relied upon the Leisure World brand.
When she learned this spring that a different real estate company had taken over those offices and that those agents were already paying the monthly $100 licensing fee in addition to a flat-fee rent, she changed the community's fee to $1 annually. That way she could enforce her trademark protection in a way that wasn't "prohibitive" to the community, she said. She said she finds it "mystifying" that the board of directors hasn't accepted her $1 deal.
If the community doesn't pay and continues to use the Leisure World name, "I'd have to send a 'cease-and-desist' letter," Cortese said. "There could be legal action involved. It's not a threat. It's just how it works."
The community could be in for a battle.
In 2007, after a two-year legal fight, Cortese won undisclosed "settlement sums" in her lawsuit against a Leisure World in California over the name and globe, according to court records. The community voted to change its name to Laguna Woods Village before the court case was resolved, but the settlement required that the 40-foot globe sculpture be dismantled.
Celia Perge, a Leisure World resident for 17 years, said fellow residents seemed to agree with her when they discussed the name dilemma recently while volunteering at Montgomery General Hospital.
"Let's just make a break and change the name," Perge, 80, said as she shopped for groceries last week. "It'll cost us money anyway, but at least we won't be giving it to them. … It just doesn't sound right to me. Why would they do this after 40 years?"
News researcher Magda Jean-Louis contributed to this article.