WeightWatchers 2010 Annual Report Download - page 32

could be diminished and our business may suffer. Our precautions may not prevent misappropriation of our
intellectual property, particularly in foreign countries where laws or law enforcement practices may not protec
t
o
ur proprietary rights as fully as in the United States. Any legal action that we may bring to protect our brand an
d
o
ther intellectual property could be unsuccessful and expensive and could divert management’s attention fro
m
o
ther business concerns. In addition, legal standards relating to the validity, enforceability and scope of
p
rotection of intellectual property, especially in Internet-related businesses, are uncertain and evolving. We
cannot assure you that these evolving legal standards will sufficiently protect our intellectual property rights i
n
the future.
We may in the future be subject to intellectual property rights claims.
T
hi
r
d
part
i
es ma
yi
nt
h
e
f
uture ma
k
ec
l
a
i
ms a
g
a
i
nst us a
ll
e
gi
n
gi
n
f
r
i
n
g
ement o
f
t
h
e
i
r
i
nte
ll
ectua
l
propert
y
righ
ts. An
yi
nte
ll
ectua
l
propert
y
c
l
a
i
ms, re
g
ar
dl
ess o
f
mer
i
t, cou
ld b
et
i
me-consum
i
n
g
an
d
expens
i
ve to
li
t
ig
ate o
r
sett
l
ean
d
cou
ld
s
ig
n
ifi
cant
ly di
vert mana
g
ement’s attent
i
on
f
rom ot
h
er
b
us
i
ness concerns. In a
ddi
t
i
on,
if
we wer
e
una
bl
e to success
f
u
lly d
e
f
en
d
a
g
a
i
nst suc
h
c
l
a
i
ms, we ma
yh
ave to pa
yd
ama
g
es, stop se
lli
n
g
t
h
e serv
i
ce or
p
ro
d
uct or stop us
i
n
g
t
h
eso
f
tware, tec
h
no
l
o
gy
or content
f
oun
d
to
b
e
i
nv
i
o
l
at
i
on o
f
at
hi
r
d
part
y
’s r
igh
ts, see
ka
li
cense
f
or t
h
e
i
n
f
r
i
n
gi
n
g
serv
i
ce, pro
d
uct, so
f
tware, tec
h
no
l
o
gy
or content or
d
eve
l
op a
l
ternat
i
ve non-
i
n
f
r
i
n
gi
n
g
serv
i
ces, pro
d
ucts, so
f
tware, tec
h
no
l
o
gy
or content. I
f
we cannot
li
cense on reasona
bl
e terms,
d
eve
l
o
p
a
l
ternat
i
ves or stop us
i
n
g
t
h
e serv
i
ce, pro
d
uct, so
f
tware, tec
h
no
l
o
gy
or content
f
or an
yi
n
f
r
i
n
gi
n
g
aspects o
f
ou
r
b
us
i
ness, we ma
yb
e
f
orce
d
to
li
m
i
t our serv
i
ce an
d
pro
d
uct o
ff
er
i
n
g
s. An
y
o
f
t
h
ese resu
l
ts cou
ld
re
d
uce ou
r
r
evenues an
d
our a
bili
t
y
to compete e
ff
ect
i
ve
ly
,
i
ncrease our costs or
h
arm our
b
us
i
ness
.
Any
f
a
i
lure o
f
our technology or systems to per
f
orm sat
i
s
f
actor
i
ly could result
i
n an adverse
i
mpact on ou
r
b
us
i
ness.
We re
l
yonso
f
tware,
h
ar
d
ware, networ
k
systems an
d
s
i
m
il
ar tec
h
no
l
ogy t
h
at
i
se
i
t
h
er
d
eve
l
ope
db
yuso
r
li
cense
df
rom t
hi
r
d
part
i
es to operate our we
b
s
i
tes an
d
su
b
scr
i
pt
i
on o
ff
er
i
ngs an
d
to ma
i
nta
i
nt
h
e recurr
i
ng
billi
ng
system assoc
i
ate
d
w
i
t
h
certa
i
no
f
our comm
i
tment p
l
ans, suc
h
as Mont
hl
y Pass. As muc
h
o
f
t
hi
s tec
h
no
l
ogy
i
s
comp
l
ex, t
h
ere may
b
e
f
uture errors,
d
e
f
ects or per
f
ormance pro
bl
ems,
i
nc
l
u
di
ng w
h
en we up
d
ate our tec
h
no
l
og
y
to expan
d
an
d
en
h
ance our capa
bili
t
i
es. Our tec
h
no
l
ogy may ma
lf
unct
i
on or su
ff
er
f
rom
d
e
f
ects t
h
at
b
ecom
e
apparent on
l
ya
f
ter exten
d
e
d
use. In a
ddi
t
i
on, our operat
i
ons
d
epen
d
on our a
bili
ty to protect our
i
n
f
ormat
i
on
tec
h
no
l
ogy systems aga
i
nst
d
amage
f
rom
fi
re, power
l
oss, water, eart
h
qua
k
es, te
l
ecommun
i
cat
i
ons
f
a
il
ures
,
van
d
a
li
sm an
d
ot
h
er ma
li
c
i
ous acts an
d
s
i
m
il
ar unexpecte
d
a
d
verse events. Interrupt
i
ons
i
n our we
b
s
i
tes o
r
off
er
i
ngs cou
ld
resu
l
t
f
rom un
k
nown
h
ar
d
ware
d
e
f
ects,
i
nsu
ffi
c
i
ent capac
i
ty or t
h
e
f
a
il
ure o
f
our we
b
s
i
te
h
ost
i
n
g
an
d
te
l
ecommun
i
cat
i
ons prov
id
ers to prov
id
e cont
i
nuous an
d
un
i
nterrupte
d
serv
i
ce. We
d
o not
h
ave a
f
u
ll
y
r
e
d
un
d
ant system t
h
at
i
nc
l
u
d
es an
i
nstant
b
ac
k
-up
h
ost
i
ng
f
ac
ili
ty. As a resu
l
to
f
t
h
ese poss
ibl
e
d
e
f
ects o
r
p
ro
bl
ems, our we
b
s
i
tes, our su
b
scr
i
pt
i
on pro
d
ucts or t
h
e recurr
i
ng
billi
ng system assoc
i
ate
d
w
i
t
h
certa
i
no
f
our
comm
i
tment p
l
ans cou
ld b
e ren
d
ere
d
unre
li
a
bl
eor
b
e perce
i
ve
d
as unre
li
a
bl
e
b
y customers. Any
f
a
il
ure o
f
our
tec
h
no
l
ogy or systems cou
ld
resu
l
t
i
nana
d
verse
i
mpact on our
b
us
i
ness
.
O
ur reputation and the appeal of our services and product offerin
g
s may be harmed by security breache
s
or privacy concerns.
Unauthorized users who penetrate our information security could misappropriate proprietary or custome
r
information or data or cause interruptions to the subscription offerings on our websites. As a result, it ma
y
become necessary to expend significant additional amounts of capital and resources to protect against, or t
o
alleviate, problems caused by unauthorized users. These expenditures, however, may not prove to be a timely
r
emedy against unauthorized users who are able to penetrate our information security. In addition to purposefu
l
security breaches, the inadvertent transmission of computer viruses could adversely affect our computer system
s
and, in turn, harm our business.
A
s
i
gn
ifi
cant num
b
er o
f
states requ
i
re t
h
at customers
b
e not
ifi
e
dif
a secur
i
ty
b
reac
h
resu
l
ts
i
nt
h
e
di
sc
l
osure
of
t
h
e
i
r persona
lfi
nanc
i
a
l
account or ot
h
er
i
n
f
ormat
i
on. A
ddi
t
i
ona
l
states an
d
governmenta
l
ent
i
t
i
es are
1
6