By Mark Teng, Executive Director (Profile) & Michael Yee, Incoming Trainee ‘23

How many people does it take to jam up McDonald’s ordering platforms? – apparently, an A.R.M.Y. 

To the uninitiated, ARMY is the term of endearment used to describe the fanatical supporters of BTS – a South Korean boyband. This BTS ARMY will do anything to win the affections and endorsement of their Oppas (South Korean for “Big brother” and the term commonly used to describe individual members of the band) and this is exemplified by the current situation with the McDonald’s BTS meal.

Backstory

Phase 2 (Heightened Alert) saw the delay of the much-anticipated BTS x McDonald’s meal. Nonetheless, the meal hit our sunny shores on 21 June 2021, Monday. While 21 June marks the first day (for the second time) Singaporeans can dine in at restaurants, the BTS meal is only available for delivery. This is part of McDonald’s efforts to deter what would have been snaking queues at its various outlets.

The power of 9 Nuggets? – Same Same But Different

Apart from 2 “special sauces” (which has attracted its fair share of haters and believers), and 9-piece nuggets enclosed in a purple box, the BTS Meal is essentially, a 9-piece chicken McNugget® meal which anyone can get on a regular day. Yet, the BTS Meal threw a wrench in McDonald’s online ordering system. Customers faced glitches on the website while some delivery platforms allegedly reflected that the item had been sold out. If that was not drastic enough, people took to the app Carousell to resell the meals (or rather the purple box and cup) at exorbitant prices. If this isn’t the economic principle of demand and supply at work in real life, we don’t know what is.

Captivation by Collaboration

We think it’s safe to assume that people buy the BTS meal for one of the following reasons:

1. To support their beloved Oppas;

2. to try the 2 “special sauces”; or

3. simply, kaypoh! (A colloquial term used to describe a nosy person/busybody).

Regardless of the why, what is certain is that BTS was able to commercialise their brand in such a manner, not only because of their strong ARMY fandom, but because of their strong Intellectual Property (“IP”) protection in the region.

BigHit Entertainment Co., Ltd. (who represent BTS) have been prudent in registering various BTS marks in Singapore since 2018. One of the many reasons why the band is able to enter into such a collaboration with McDonald’s is because their registered trade mark gives them control over the way they commercialise their brand (If you want to know more about why you should register your brand as a trade mark, click here).

The collaboration has encouraged both fans and non-fans of BTS to buy the meal and has been a tremendous success. Whatever the reasons for the purchase may be, the main message here is that a collaboration between two eminent brands is one that inevitably creates commercial value.

Typically, collaborations are governed by what we call, a “Trade Mark Licence Agreement” or a “Collaboration Agreement”. On the most basic level, the agreement could entail McDonald’s offering BTS royalties for McDonald’s to use BTS’s trade mark in the course of selling the McNuggets® meal. The revenue garnered from the collaboration may also be shared between the collaborating parties in the form of royalties. Limited period collaborations would often see a skyrocketing of revenue. Additionally, collaborations may help expand the market share of both parties over the long run.

While the commercial arrangement between BTS and McDonald’s are naturally confidential, it is more likely than not that the two have some semblance of a Trade Mark Licensing or Collaboration Agreement to use their respective trade marks in the promotion of the meal. In fact, collaborations have long been used as a marketing strategy to drive up sales for certain goods and services.

For example, famous rap artistes like Travis Scott have similarly done a collaboration with McDonald’s. Likewise, Kanye West has collaborated first with Nike, and then with Adidas to create his famous Yeezy series/line.

Good Fences Make Good Neighbours

Most businesses dream of striking a commercial deal with a reputable brand, but a word of caution from us –  not every collaboration agreement ends with a Happy Meal®. There’s a saying amongst lawyers that goes, “Good fences make good neighbours”. No matter how good your relationship may be with the other party, it’s always better to define the terms of the working relationship at the onset – less even good friends forget or come to a later misunderstanding. This can come in a multitude of forms such as defining the IP terms clearly, coming to terms on the scope of use or negotiating on the structure and quantum of royalty payments and mechanisms.

We understand that when it comes to agreements between parties, it isn’t always the case that parties possess equal bargaining power. Be that as it may, the age-old business adage still holds true: “Unlike sport, in business, win-win is the best possible score”. Fundamentally, the principle behind collaborative businesses is to allow both businesses to flourish in their own respect and for the partnership to be mutually beneficial – in our experience, That®’s the best kind of deal to make.

The commercialisation of intangible assets like intellectual property are not only limited to licensing or collaboration agreements. There are many other ways in this modern world to profit from one’s intangible assets (such as, inter alia, franchising agreements and distribution agreements). At That.Legal LLC, we assist our clients to protect, commercialise and if need be, enforce their rights in their intangible assets.

If you have any questions regarding trade mark registration or what makes a good collaboration agreement or simply want to know more about intangible assets, do drop us an email at ask@that.legal and #LetsTalkAboutYourChallenge.

Disclaimer

The contents do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. You should seek legal advice or other professional advice in relation to any particular matters you or your organisation may have.

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