SUNBEAM JEOPARDIZES IMAGE WITH LAWSUIT AGAINST AMA

By Published on .

A high-profile spat with the American Medical Association could cast a dim light on Sunbeam Corp.

The appliance marketer last week sued the AMA in U.S. District Court in Chicago for $20 million, for seeking to escape a controversial licensing deal.

The suit was prompted by the AMA's move to renege on the agreement it signed earlier this summer with Sunbeam to exclusively endorse a line of medical products (AA, Aug. 18).

Under the terms of the deal, the AMA would have received royalties on the sales. Its decision last month to pull out of the deal came after a ferocious backlash from the media and from doctors who resented the exclusive arrangement.

So far, advertising hasn't supported the endorsement deal. Ogilvy & Mather, Chicago, is Sunbeam's agency.

Observers said that despite the merits of Sunbeam's case, the company and Chairman Al Dunlap risk bad publicity for seeking to enforce a contract roundly condemned by others.

Sunbeam is "in the wrong from a public relations standpoint," said Al Ries, chairman of marketing consultancy Ries & Ries. "If the public feels [the licensing deal] is a violation of trust, Sunbeam should bow to the wishes of the

In this article:
Most Popular