WeightWatchers 2013 Annual Report Download - page 34

affected in the fourth quarter of fiscal 2012 by the impact of Hurricane Sandy and its aftermath. The occurrence
of any event that discourages people from gathering with others or impedes their ability to access resources could
adversely affect our business, financial condition or results of operations.
Third parties may infringe on our brand and other intellectual property rights, which may have an
adverse impact on our business.
We currently rely on a combination of trademark, copyright, trade dress, trade secret, patent and other
intellectual property laws and domain name dispute resolution systems to establish and protect our proprietary
rights, including our brand. If we fail to successfully enforce our intellectual property rights, the value of our
brand, services and products 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 protect our proprietary rights as fully as in the United States. Any legal action that we may
bring to protect our brand and other intellectual property could be unsuccessful and expensive and could divert
management’s attention from other business concerns. In addition, legal standards relating to the validity,
enforceability and scope of protection 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 in the future.
We may be subject to intellectual property rights claims.
Third parties may make claims against us alleging infringement of their intellectual property rights. Any
intellectual property claims, regardless of merit, could be time-consuming and expensive to litigate or settle and
could significantly divert management’s attention from other business concerns. In addition, if we were unable to
successfully defend against such claims, we may have to pay damages, stop selling the service or product or stop
using the software, technology or content found to be in violation of a third party’s rights, seek a license for the
infringing service, product, software, technology or content or develop alternative non-infringing services,
products, software, technology or content. If we cannot license on reasonable terms, develop alternatives or stop
using the service, product, software, technology or content for any infringing aspects of our business, we may be
forced to limit our service and product offerings. Any of these results could reduce our revenues or our ability to
compete effectively, increase our costs or harm our business.
Our reputation and the appeal of our services and product offerings may be harmed by security breaches
or privacy concerns.
Breaches of security could result in unauthorized access to proprietary or customer information or data or
cause interruptions to our products and services. Such unauthorized access could harm our reputation, expose us
to liability claims and may result in the loss of existing or potential customers. In addition, the transmission of
computer viruses, or similar malware, could adversely affect our computer systems and harm our business
operations. As a result, it may become necessary to expend significant additional amounts of capital and other
resources to protect against, or to alleviate, problems caused by security breaches. These expenditures, however,
may not prove to be a sufficient remedy.
Most states require that customers be notified if a security breach results in the disclosure of their personal
financial account or other information, and additional states and governmental entities are considering such laws.
In addition, other public disclosure laws may require that material security breaches be reported. If we experience
a security breach and such notice or public disclosure is required in the future, our reputation and our business
may be harmed.
In the ordinary course of our business, we collect and utilize proprietary and customer information and data.
Privacy concerns among prospective and existing customers regarding our use of such information or data
collected on our websites or through our services and products, such as weight management information,
financial data, email addresses and home addresses, could keep them from using our websites or purchasing our
20