The American Medical Association is asking a federal court to null its controversial marketing agreement with Sunbeam Corp. on the basis that it is ethically questionable and may violate false advertising laws.
In a 28-page document filed Oct. 14 in U.S. District Court in Chicago, the AMA said 11 times that the agreement is "invalid and unenforceable."
Specifically, the AMA says in its legal response to Sunbeam's lawsuit, the deal violates its ethical standards, which the organization says gives it the right to nix the use of its trademark on Sunbeam's healthcare products.
Also, the statement that Sunbeam proposes to put on its product packaging--that it and the AMA have "joined together to bring you products specially designed for healthier living"--violates federal false advertising laws, the AMA says.
Federal Trade Commission regulations say that if a company is citing an endorser's expertise in relation to a product, the endorser must have examined or tested that product. Under the AMA-Sunbeam agreement, the AMA would not test products bearing its seal.
The AMA response came five weeks after Sunbeam filed a contract infringement lawsuit. Sunbeam spokeswoman Nicole Reilly says Sunbeam attorneys are reviewing the response, so the company would have no comment on it.
The five-year deal, signed Aug. 5, would have given Sunbeam the right to use the AMA's seal in exchange for what was expected to be millions of dollars in royalties for the AMA. In its lawsuit, Sunbeam said the value of having an exclusive marketing agreement was worth at least $20 million in Sunbeam sales.
However, the AMA questioned the value of the deal following public backlash, which it says was strong even before the Aug. 21 news conference at which the AMA first publicly disavowed it. As a result, the AMA characterized as"rank speculation" projections that the deal would have gained $20 million for Sunbeam.
The AMA says that with continued opposition from such groups as consumer protection activists and medical societies, there may be doubt if Sunbeam "was damaged at all."
In the response, the AMA also: