A Brand Everyone Knows

Since 1963, Weight Watchers has been telling people how to take off those extra pounds. Market saturation is so complete that 97 percent of U.S. women know the brand, the company reports. But eternal vigilance is the price of fame. "Don't mess with our trademark," GC Robert Hollweg warns those who would poach the Weight Watchers name.

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NAME AND TITLE: Robert Hollweg, vice president, general counsel and secretary AGE: 60 LESS IS MORE: Weight Watchers International Inc. sounds more like a social movement than a business. The corporate mission: to make slimmer, healthier, happier people by changing how they think and what they eat. Since 1963, Weight Watchers has been telling people how to take off those extra pounds. Today, the company operates in 30 nations, where roughly 1 million members trek to one of 39,000 weekly meetings. The Woodbury, N.Y.-based company also has morphed over the years, going public, then private, and now public again. A down economy is not a drag: 2002 net revenues hit $809.6 million, up 30 percent, from $623.9 million in 2001. To many, Weight Watchers means “diet,” and that is the source of many of the company’s legal headaches. Market saturation is so complete that 97 percent of U.S. women know the brand, the company reports. That fact is not lost on peddlers of quick fixes like diet pills, who have clashed with the company in court over trespassing on Weight Watchers’ home in cyberspace. LEGAL UNIT: GC Hollweg oversees three in-house attorneys and a core contingent of outside counsel. Hollweg is virtually a lifer at Weight Watchers, having joined in 1969 as assistant corporate counsel. Since becoming general counsel in 1997, Hollweg’s goal has been to cultivate focus and flexibility in each of his in-house lawyers. One tackles intellectual property, another real estate and licensing issues, a third transactional work and some licensing business. These boundaries are fluid, and lawyers change hats from time to time, so that each one has the experience to back up the other. “I think I’ve created a team of lawyers who know Weight Watchers’ business and who are able to serve our clients in a smart way and a cost-efficient way,” Hollweg said. Litigation projects usually go to outside counsel. A hefty amount of transactional, licensing, real estate and employment work stays inside. “DON’T MESS WITH OUR TRADEMARK”: This is Hollweg’s warning to those who would poach the Weight Watchers name. Eternal vigilance is the price of fame, especially brand-name fame when your company is selling a slimmer, trimmer you. Cyberspace is a prime battlefield in the diet industry’s intellectual property wars. “The Internet is a new dimension,” Hollweg said, adding that the company used newspapers and clipping services to police its trademarks before the dawn of the digital age. LITIGATION: Last April, Weight Watchers sued DietWatch.com Inc., alleging that DietWatch inserted clickable links on Weight Watchers’ subscribers-only Web site, including highlighted words like “weight loss” and “meal plan.” When subscribers clicked on the terms, they were beamed over to the DietWatch Web site. The suit settled in June 2002, with Weight Watchers getting a permanent injunction against DietWatch, plus $25,000 in attorney fees. Then Weight Watchers went after USA Prescription Inc. in October. The suit accused USA Prescription of installing unauthorized “pop-up” ads on the Weight Watchers Web site to peddle diet pills. In January 2003, Weight Watchers got a permanent injunction; other terms of the order are confidential. Despite the size of the company, Hollweg said that he is not hobbled by bureaucracy when making litigation decisions. “[There are] not a lot of layers of management here,” he said, explaining that he speaks to management, describes the game plan, then talks with outside counsel and gets the case going. It’s clear from the litigation Weight Watchers gets involved in that being a household word is not always a good thing. Zealous fans and their Web sites create additional problems if they spout inaccurate information or use proprietary information. “Sometimes they cross over the line,” Hollweg said, explaining that “I don’t have a staff to monitor the sites 24/7,” although they “do police the trademark on a regular basis.” FTC INVESTIGATION: Trouble arose in the 1990s when the Federal Trade Commission (FTC) launched a widespread investigation into the nation’s weight-loss industry, including Weight Watchers. In short, the company faced accusations of false advertising concerning testimonials as to the effectiveness of its program. Hollweg was not yet general counsel, but he was involved because he vetted advertising as a company lawyer. Weight Watchers entered into a consent agreement with the FTC in 1997, a move prompted partially by cost concerns. “We would have spent millions of dollars litigating it,” Hollweg said. But the company turned the experience into a public-relations boost, entering into a partnership with the FTC and other entities to educate the public about weight loss. One purpose of the consortium, called “The Partnership for Healthy Weight Management,” was to design voluntary guidelines for weight-loss centers. OUTSIDE COUNSEL: No wonder Hollweg lines up heavy hitters as outside counsel. These days, the SEC work goes to New York’s Simpson Thacher & Bartlett, where partner Rise Norman is the point person. Terence Ross at Los Angeles’ Gibson, Dunn & Crutcher is the contact for IP matters, and Martin Flumenbaum, a partner at New York’s Paul, Weiss, Rifkind, Wharton & Garrison, tackles arbitrations and franchise work. ROUTE TO THE TOP: Hollweg has come a long way without going far from home. The 60-year-old Bronx native earned a bachelor’s degree in English from Fordham University in 1964. He looked for direction: “I’m graduating in 1964 and what am I going to do with the rest of my life?” He returned to Fordham to earn his J.D. For six months, Hollweg worked at his storefront practice in the Bronx, N.Y., taking on “anything that came through the door. “Then, after an 18-month stint as a writer for Matthew Bender, a colleague suggested he follow him to Weight Watchers. His first job there was as assistant corporate counsel focusing on IP, franchising and licensing. “I didn’t know anything about trademarks at the time,” Hollweg said. He learned, and joined the U.S. Trademark Association, now the International Trademark Association. Back then, he said, brand protection wasn’t what it is today, though there were still court battles against those trying to purloin a bit of the company’s early success. He has stayed at Weight Watchers so long, he said, because of the variety of work. In the 1970s, he immersed himself in trademark cases, litigating a key case in Canada concerning the validity of Weight Watchers’ mark worldwide. Then there was a successful battle against Weight Watchers franchisees who accused their parent company of price fixing and antitrust violations. The 1980s were peppered with more battles to protect the brand name, and the 1990s brought the federal government diet industry probe. When the company re-emerged as a public entity in 2001, the regulatory atmosphere was charged by Enron-style scandals. FAMILY: Hollweg married his wife, Irene, the year he joined the Weight Watchers legal department. He and Irene, a former school teacher, have four sons, and Hollweg’s Woodbury, N.Y., office is not far from where he grew up and first launched his law practice. LAST BOOKS READ: “Song of Solomon,” by Toni Morrison and “The Left Behind Series,” by Tim LaHaye and Jerry B. Jenkins.

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