By Jonathan Stempel

NEW YORK, Sept 16 (Reuters) - Weight Watchers International Inc on Wednesday sued Nestle AG, accusing the Swiss-based food company of illegally using its name to promote low-fat frozen dinners and ice cream.

According to a lawsuit filed in Manhattan federal court, Nestle is without permission displaying trademarks for Weight Watchers and its 'Points' weight loss system on packaging for its Stouffer's Lean Cuisine products, including frozen pizzas and flatbreads, and its Skinny Cow diet ice cream products.

Weight Watchers said the displays are intended to take advantage of its 'goodwill and high reputation among consumers' in the field of weight control, which the New York-based company said it has 'painstakingly built' over 46 years.

It also said the displays could confuse consumers into believing Weight Watchers produced or endorsed consumption of Nestle products, some of which compete with its own.

Though well-known for chocolate products, Nestle is also the parent of Jenny Craig Inc, a major Weight Watchers rival. Nestle bought Jenny Craig in 2006 for about $600 million.

Nestle did not immediately return calls seeking comment. The company has U.S. operations in Glendale, California.

Weight Watchers is seeking remedies including restitution of improper profits, triple damages, punitive damages, and a halt to misuse of the trademarks.

Shares of Weight Watchers closed Wednesday up 28 cents, or 1.1 percent, at $26.29 on the New York Stock Exchange.

The case is Weight Watchers International Inc v. Nestle USA Inc, U.S. District Court, Southern District of New York (Manhattan), No. 09-7964.

(Additional reporting by Aarthi Sivaraman in Seattle; Editing by Gary Hill) Keywords: WEIGHTWATCHERS/NESTLE

(jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net)

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