WeightWatchers 2015 Annual Report Download - page 22

Any event that discourages or impedes people from gathering with others or accessing resources could
adversely affect our business.
Our meetings and Online businesses are subject to conditions beyond our control that may prevent or
impede current or prospective members from attending or joining meetings, or subscribers from accessing our
Online products, including extreme weather, terrorism, health epidemics, loss of resources such as electricity,
national disasters and other extraordinary events. 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. These evolving legal standards may not 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.
Outcomes of litigation or regulatory actions could adversely impact our financial condition.
From time to time, we may be a party to lawsuits and regulatory actions relating to our business operations.
For example, in the past, we have had disputes with our franchisees regarding operations and other contractual
issues. Due to the inherent uncertainties of legal actions and regulatory proceedings, we cannot predict their
outcomes with certainty. Therefore, it is possible that our results of operations, financial condition or cash flows
could be adversely affected by the unfavorable resolution of one or more legal or regulatory actions. As we
expand our offerings in certain healthcare channels, consumers may misconstrue our program as providing
medical advice. As we clearly state in our consumer communications, most of our service providers do not have
extensive training or certification in nutrition, diet or health fields beyond the training they receive from us.
Despite our disclaimers, as more customers come to us through the healthcare channel they may misperceive that
our service providers are providing medical advice regarding weight loss and related topics. We may also be
subject to claims that our service providers have provided inappropriate advice or have inappropriately referred
or failed to refer customers to health care providers when needed. Regardless of the outcome of any legal action
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