Leisure World residents in fight over name

Daughter of developer wants licensing fee after 40 years of free use

December 05, 2010|By Katherine Shaver, The Washington Post

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.

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