Patents Don't Block Innovation, Ignorance Does

Join host Bruce Berman for an illuminating conversation with Henry Hadad, Head of Intellectual Property Rights at Bristol-Myers Squibb. This episode explores how intellectual property education and strong patent protection drive medical breakthroughs while addressing common misconceptions about IP rights. 

Hadad shares his unique journey from a creative family background—his uncle wrote disco classics like "It's Raining Men"—to becoming a leading voice in pharmaceutical patent strategy. Learn how the patent process explained through real-world examples demonstrates why IP protection strategies are essential for developing life-saving treatments. Discover insights on startup IP challenges, the role of university research, and why patent basics matter more than ever in our innovation-driven economy.

Key Takeaways:

• Strong patent systems drive innovation by providing investment certainty
• University research partnerships create vital public-private innovation bridges
• Patent licensing enables smaller inventors to monetize their discoveries
• AI-generated inventions pose new challenges for patent eligibility
• China's improving IP system creates competitive pressure for US innovation
• Clear communication about IP benefits counters harmful misconceptions
• Patent certainty affects venture capital investment decisions
• Pharmaceutical patents enable continued research into new disease indications

Transcript

[Bruce Berman] (0:00 - 0:35)
Hello, I'm Bruce Berman, the host of Understanding Intellectual Property Matters, the place where the leading innovators and experts share their IP story, the good, the bad, and the incredible. Henry Haddad grew up in a creative home. His father was a successful songwriter, his uncle a well-known actor and Oscar-winning hitmaker in the 1970s.

The creative urge did not escape Henry. He is the head of intellectual property rights at Bristol-Myers Squibb, a leader in addressing cancer and pulmonary disease and using IP rights to build bridges. Welcome, Henry.

Thanks for joining us today.

[Henry Haddad] (0:36 - 0:39)
Hey, thanks, Bruce, for inviting me. I look forward to our discussion.

[Bruce Berman] (0:39 - 0:54)
Well, let's get right into it. It's no accident that the U.S. is the leader in technology and drug discovery, as you know, and as well content creation such as music and movies. How much of a role would you say that IP rights play in that success?

[Henry Haddad] (0:54 - 1:47)
I would say one of the key drivers of the creative and innovative engine of our country is the role that IP has played since the inception of our country. That incentive that if you do something great, whether it's a creative act or an invention, you can protect it from being appropriated for a period of time. You've now taught the world how to do it, how to improve upon it.

But in return, you're getting this limited period of exclusivity where you can monetize it and then drive that into drive that revenue back into the next cycle of innovation. I think it's been an incredible engine for creativity. We've seen the greatest advances in history over the past couple of hundred years, just in my lifetime, largely driven by IP in all forms, whether it's patents, trademarks, copyrights or trade secrets.

[Bruce Berman] (1:47 - 2:10)
The Bayh-Dole Act, for example, permits universities doing basic research to transfer or license their patents to better capitalized and more experienced businesses that are better equipped to deliver products to the marketplace. How important would you say is that early university research? Can't that be done by large companies as well?

[Henry Haddad] (2:10 - 3:48)
So I've been practicing now for, gosh, over 30 some odd years, just about 35 years. And what I've seen is basically a trend that a lot of the basic research, particularly in the life sciences, does take place through NIH, government funded research, more academic research, because there you have people really blue skying it, right? Trying different things that may or may not be practical, but ultimately may have an incredible therapeutic impact, the learnings from this, right?

So exceeding that basic research has been an incredible boon to healthcare around the world. None of these academic institutions, nor frankly most startups, really have the ability to take a drug that's been discovered and then ultimately bring it through development into the approval process and get it out to patients. So that's where a lot of the larger biopharma companies come in.

Now in the case of BMS, but frankly in the case of most of the large biopharma companies, we have a discovery arm. We have an arm which looks externally. And a lot of times those are startups which are based on the premise of some academic research.

So I think Bayh-Dole, by creating that incentive, by creating the ability to contractually move the technology into private hands, creates this wonderful public-private partnership where money flows back to the academic institution, it funds their further research, and then again generates new therapies in the future.

[Bruce Berman] (3:48 - 4:03)
But the Trump administration now has said that it would like to participate in the ownership of those rights because the government is ultimately funding much of that basic research. What's your thinking about that?

[Henry Haddad] (4:04 - 4:59)
Of course, like everything, Bruce, the details matter here. In a way, they are participating already because if, for example, you license an asset or some type of technology from a university, you're paying them a license fee which will be somewhat dependent on what revenue you ultimately get from that once the product is commercialized. And that money should flow back to the academic institution and back through into the government, effectively, because it is funding a sponsored institution.

But whatever deals the government wants to make with those institutions which are being funded is something between academia and the government, whereas we'll continue doing what we're doing, which is look for the best potential therapies, license them, and then hopefully bring them to patients.

[Bruce Berman] (4:59 - 5:35)
Now, certainty of IP rights, like patents, for example, are less problematic in pharma because there is maybe a few patents or one patent responsible for a particular drug, whereas in the tech area there are dozens or hundreds sometimes of patents that go into a particular product or are consumable. What about certainty? Has certainty gotten weaker?

Are patents more uncertain today? That's what seems to be the feeling in the tech world, perhaps less so in pharma.

[Henry Haddad] (5:35 - 6:55)
I wish that was the case, Bruce, but I think like everywhere, certainty depends on the context. Yes, if you look at the top 300 patent holders, you will barely see a biopharmaceutical company in that grouping, and often when you see a name that's familiar, it's because they have an agricultural arm or because they have a medical device arm, because we do get fewer patents, but they are ultimately more critical and more existential to our industry. But for the patents, because of the nature of biopharma research and the approval process and the existence of generics and biosimilars, which don't have to do their own research but effectively appropriate the research that you've done, we need a strong patent system.

We need a meaningful period of exclusivity such that we know we can continue to invest in that product. And remember, Bruce, it's not just that initial investment toward that first approval. Many products, particularly biologics, there's continued investments, right, even after that first approval to make sure that you go from the melanoma indication to the lung cancer indication to the head and neck cancer indication.

All those things are critical for patients, and we need that runway to know that those investments, which can be in the hundreds of millions of dollars per clinical trial, are going to be able to recoup their costs. Otherwise, you just don't do them.

[Bruce Berman] (6:56 - 7:04)
I think the average drug today that is commercializable comes in about $1.2 billion or more.

[Henry Haddad] (7:05 - 7:43)
Yeah, I hear $2 billion on average, and there's countless failures along the way. Sometimes they're early. A lot of times they're late.

A lot of times the data doesn't play out the way you hope it does, and that's unfortunate for both the company and patients. But ultimately, those few successes are the ones which fund the next generation of research, and we need to keep fostering that. So any impact on the certainty that the patent right provides, that duration of exclusivity, is incredibly destabilizing to this ecosystem of investing in research and then hoping that research bears out into a helpful therapy for patients.

[Bruce Berman] (7:44 - 8:31)
In pharma, I think that's a pretty clear cut. However, in tech, where there are so many patents and there's so much uncertainty, one of the arguments is that when a patent is issued, it's still an application because if it's subject to scrutiny, like litigation or a PTAB, it probably won't hold up. I think the numbers are against it holding up in general.

The ease of access of copying on the internet and digitalization of content make it feel like images, music, even products are there for the taking or should be. Property, people believe, some people, many, is for intangible assets like real estate, not for developments which are digitized. How do we get here and what do we do about this?

[Henry Haddad] (8:31 - 8:35)
Boy, there's so much I can say here, but where do I start?

[Bruce Berman] (8:35 - 8:36)
You have the platform.

[Henry Haddad] (8:37 - 12:23)
Okay, let's start where we're seeing things happen, the trends. I think with the advent of the internet 25, 30 years ago and social media, there is almost an expectation that things are there for the taking, whether it's a published article which is copyright protected or a song or a piece of art. They're images that can be just pulled down.

Part of that is because it's just easy to do it. I personally think the music industry took a huge hit when things like Napster were created, ultimately, because people could take it without any compensation back to the artist or the writer or the publisher. Ultimately, that pie which used to be the record, back in my day, the record or the CD, which the hard medium that everyone would take a piece of, shrunk dramatically when people realized it could be zero.

Ultimately, I think most people felt better about it when they paid 99 cents a song. Now they move to streaming media like Spotify. Honestly, from my understanding, the pie which was this has now shrunk to this in the recording industry, because ultimately, the artists are basically out leveraged.

If you can't just take the music, it will be taken if it's more expensive than people are willing to pay. Long story short, I think that was a change in cultural norms that is influencing this generation. It's pretty clear that over the past 20 or so years, several large tech companies find the patent system more burdensome than helpful, because of their business model, which is new hardware, new software every couple of years.

The patent system isn't really well suited for protecting those things. Frankly, smaller companies or individuals who may have patents on that may want to monetize that by licensing that to these companies. Maybe they don't want to license it.

I think that, in large part, drove some of the legislation, like the AIA, particularly the PTAB provisions in there. I think it drove some of the Supreme Court jurisprudence, like on 101, which had eligibility. Long story short, I think all of those things, when you look at the legislation, you look at the court cases, you look at the cultural norms.

That has pushed society in this direction. When you add on top of that what's specific to my industry, which is the reasonable discussion around drug pricing, access versus innovation, how we fund innovation, and how we balance the need for access for patients, that creates a real complex set of considerations, which have really pushed the patent system a bit against the wall. It's one that I constantly speak about, because I really want people to understand.

We should just look at the principles. What do we want to incentivize here? What are we trying to achieve?

Not get caught up in the seventh level down of terminal disclaimers or continuation applications or 101, but really strip all that away and say, what do we want to incentivize? What we want to incentivize are cutting-edge new therapies for patients. The question then becomes, how do we fund that?

How do we make sure that patients have adequate access? If we use that as our north star, I think my industry would be well-suited.

[Bruce Berman] (12:23 - 13:04)
How do we convey, Henry, effectively, that copyright and patents are pro-innovation? They're pro-business. They're pro-competition.

They don't build barriers. They create bridges. You would believe from some of the media and some of what you hear that IP rights are not leveling the playing field and are making it harder to share information and discoveries.

You're uniquely equipped because not only do you have an interest in pharma and a background in biology, but you're very well-attuned to tech and AI and other issues and content even that a lot of folks are not.

[Henry Haddad] (13:05 - 16:58)
I'll start with a little bit of the background. You alluded to at the intro that I have come from an entertainment family. I was very privileged to have a father, a lovely man, who was a great songwriter, lyricist, and composer of songs in the 50s and 60s for artists like Connie Francis and Frankie Avalon and the McGuire sisters and Neil Sedaka.

They're wonderful, wonderful pop songs. He loved those songs very much. My mom's brother, on the other hand, was of the hippie generation.

He was in the original cast of Hair, both Off-Broadway and On-Broadway. He was an incredible entertainer and talent. His name was Paul Jabara.

He ultimately did his own albums. He was a theater guy, but he wrote a lot of songs during the disco era, so they became necessarily sort of disco-fied. Songs like Last Dance or It's Raining Men and several others.

He wrote a lot of these songs. They have just taken on a life of their own in a way which is spectacular. I'm so proud of them and what they did, but a couple of things there sort of led me into this profession.

I think at a minimum, when I indicated interest in music to both of them, they laughed at me and said, no, no, you don't want to go into music. It's the lawyers who make the money. You need to become a lawyer and protect our rights.

That was sort of not the reason why I got into it, but I remember that in my head. When I went to college and I was a biology major, thinking I was going to become a doctor, and then fast found out that I was particularly bad at the lab and I was particularly bad at bleeding rabbits and doing immunology things, which involved giving injections, I said, I'm going to be a terrible doctor. So I pivoted to law, not even knowing that there was something like patent law out there.

But when I started applying for summer associate jobs back in 1990 or so, a number of firms were interested in me that were involved in patent law. So my first question, of course, is what is patent law? I learned a little bit about it.

I took a course, a guy named Tom Irving from Finnegan Henderson taught the course at American University Law School, and I learned a lot from it. I did enjoyed it a lot. And I summered there.

And I was very excited because I was able to afford my first guitar because I was really wanting to buy a guitar and I never had the money for it. So I did get that. It was it's a terrible guitar, but I still have it.

It started out as a job for me. And then somewhere along the line, this became an incredible passion for me. And part of it was because of the background of my father and my uncle.

Part of it was because of my grandparents who were immigrants from from Lebanon and Syria and who instilled in me a real love of this country, but also like this idea that, you know, if you work hard, you should be able to get the fruits of that labor and then create a business and create economic growth and all that thing, lift your community, all those things, Bruce, right? Part of it was that. And part of it was free.

And this is, you know, a sad part of it was seeing that my uncle, who passed away in 1992 of HIV, died of a disease for which at that point there was no cure. But today, there is at least drugs which keep people alive and allow them to have meaningful lives. And hopefully we'll get to a cure.

But that, too, was part of this whole sort of stew of things where I look back and go, wow, I see why I love this so much and why I believe in it so much, because of all these things around creativity and innovation and health care, which are so important to our society.

[Bruce Berman] (16:59 - 17:07)
You know, the notion that you see billboards in Washington and Geneva during the pandemic, especially, that say patents kill.

[Henry Haddad] (17:08 - 17:08)
Right.

[Bruce Berman] (17:08 - 17:14)
And I know you're involved in IP education with the IPO Foundation. You think you're president or our president.

[Henry Haddad] (17:14 - 17:17)
I am currently president of the board of the Education Foundation.

[Bruce Berman] (17:18 - 18:07)
Manny Schechter was a president. He's on our board, the CIPU board. But businesses seeking to license their rights are often called patent trolls because they want to license.

They don't have access to capital to turn their inventions into products on their own, so they turn to licensing and they're demonized for it. Now, surely some of these companies trying to license are dubious or questionable and that you're basically looking for a lawsuit. But I have found that's like really a few percent, if any, at that.

What do we do to turn that image around and that ethos that patent licensing, aggressive use of IP rights is negative and dangerous? It's anything but. If anything, it's positive, I think.

[Henry Haddad] (18:08 - 18:26)
Bruce, this is one of the great efforts that I am trying to work with colleagues across the technologies to course correct, which is the constant flow of misinformation. And the frustrating part is that some of it is coming from folks who clearly know better.

[Bruce Berman] (18:26 - 18:26)
Right.

[Henry Haddad] (18:27 - 18:52)
But they realize that if they lob something out there, even if you correct it, even if someone writes an article saying that's not correct, even if the USPTO says, no, there's no crazy extended periods of exclusivity for biopharma drugs. Here's the truth. It's like 14 years or whatever, 12 years.

Even when you get things from the government, those will be ignored in favor of things which drive agendas.

[Bruce Berman] (18:52 - 18:53)
Right.

[Henry Haddad] (18:53 - 21:00)
And, you know, there will always be folks who are sort of, you know, biopharma is bad or big tech is bad or this one's bad or that one's bad. And they will use those narratives to their benefit. Yeah.

I think at a basic level, what we need to do is we need to speak in clear and plain terms with emotionally resonant examples of what we're talking about here. Let's use my industry as an example. You can talk all about thickets and product hopping and this and that.

And frankly, if you actually walk people through those things, if you say, oh, you're happy we got a patent that covered the compound for its use in treating melanoma, would you like us to do the study which shows that it's effective in lung cancer? Yes. Yes, I would.

Okay. That's hundreds of millions of dollars. Would you like us to, instead of it being an IV product, which you have to go to the hospital, would you like it better for cancer patients to be able to inject it at their home or just go to a doctor's office and have it injected and be in and out in an hour rather than spend a day in a hospital, which may be hours away from their home?

What would you prefer? Oh, of course we would want that. Right.

And when you walk people through that, suddenly you're like, well, I just explained to you patent thickets and product hopping. And how do you argue against that once you, but these taglines like trolls and hopping and thickets take root. And we need to be able to get out there very plainly, very clearly.

And it can't be just industry. It has to be patient groups. It has to be members of society who go, we want these innovations to happen.

Right. And I think obviously I think a lot about the tech industry. I think very highly of the tech industry and what it's accomplished.

Many of my very good friends in this industry work on behalf of tech. We don't always agree, but we have a mutual respect. But I have to say that they seem to be doing okay.

[Bruce Berman] (21:01 - 21:01)
Yeah.

[Henry Haddad] (21:01 - 21:10)
Right. I mean, how many trillion dollar companies do you need to have before you say, is really the troll problem, is that really a big problem for you? I mean, come on.

[Bruce Berman] (21:10 - 21:14)
It's two cents, two cents earnings per share to settle everything.

[Henry Haddad] (21:14 - 21:33)
Yeah, exactly. I mean, or you or you look at their SEC filings or 10 K or 10 Qs and you go under, let's look at the material litigation or the material issues and how many patent cases are material to Apple's business or Google's business or Microsoft's business. Not many.

[Bruce Berman] (21:33 - 21:33)
Right.

[Henry Haddad] (21:33 - 22:07)
I mean, listen, I am sympathetic to the concerns of some of these companies that they're being shaken down for, you know, and I see it, too, shaken down for attorneys fees by generic companies who really don't have a case, but they're like, we'll shake you down for it, you know, and it's real. But we shouldn't throw the baby out with the bathwater. I think targeted solutions to problems we could all hold hands on.

And it's just the general dilution of the patent system, which I think is bad for society as a whole.

[Bruce Berman] (22:08 - 22:51)
That's that's well put, Henry. You know, I think it's it's difficult for even bright people, investors to fathom that tech companies could have 30,000, 40,000 patents and really not like them and not like the certainty of patents, the extent of the certainty they don't get it. Well, they have patents, don't they?

Don't they want to be worth something? Well, they want their patents to be worth something, but not other people's patents sometime. Does the risk of making it difficult for new and disruptive inventions to achieve fair market value, is that, you know, because of unfavorable laws, does it affect investment capital, do you think?

[Henry Haddad] (22:51 - 23:14)
100 percent. Absolutely. I've seen studies, you know, which show that venture capitalists are moving their money toward commodity investments rather than high risk innovation investments because they don't trust the patent system.

Right. And look, I think there's been some improvements. You know, I sat on PPAC for a few years.

[Bruce Berman] (23:15 - 23:20)
PPAC is just for people who don't know it's the public patent. What is it called?

[Henry Haddad] (23:20 - 23:31)
Public Patent Advisory Committee. Advisory Committee. It's currently we don't have a PPAC.

It's part of the USPTO. Oh, yeah. I was actually employee of USPTO, which I have to say I enjoyed immensely.

[Bruce Berman] (23:32 - 23:34)
No, no conflict of interest there, right?

[Henry Haddad] (23:34 - 24:51)
No, no. But you clearly were doing your job as an interested citizen. Like I never talked about pharma stuff.

I never, you know. Right. It was all about understanding how the office works and giving advice as a business person, how you can do things more efficiently or as a stakeholder, you know, how we can improve examination quality.

And I loved it. And I loved working with the folks there. And, you know, even I, who have been a very vocal critic of the PTAB as an organization, really think very highly of many of the people, the judges sitting there.

Right. I mean, they clearly care. They clearly care about the system and they want to make it work.

But the the system itself was set up for patents to fail. I mean, just the way it was. And I think there is some course correction going on currently under acting director, Director Stewart, to try to sort of more level set this again, you know, and that happened a bit under under Director Iancu.

Right. Right. And the problem with that system is, and I'm, of course, happy to see some of those changes, is the patents are 20 year property rights.

Right. Right. And they can't be an accordion in terms of their scope, depending on who's in office every four years.

[Bruce Berman] (24:52 - 24:52)
Right.

[Henry Haddad] (24:52 - 25:06)
Otherwise, how do you possibly have an investment worth making? So what we need is some continuity. You know, when I started, patents were not a political tool.

They were a sleepy backwater. Right. You know, whoever the director was, cares.

[Bruce Berman] (25:07 - 25:10)
You started at Kenyon, I believe, as an associate. Kenyon and Kenyon.

[Henry Haddad] (25:10 - 25:30)
That was that I actually started a couple of years earlier. I got my first job at the Shergroom Iron Firm down in D.C. in 91 and worked there for two, three years, I think, and then went up to New York. I'm from New York originally.

I'm from Brooklyn. So I went back to New York to live in Kenyon.

[Bruce Berman] (25:31 - 25:44)
I did work for Kenyon for five years. I was the outside marketing and communications counsel. They had a business card from 1853 that the font had not changed since 1853.

[Henry Haddad] (25:44 - 25:52)
I loved seeing my name like back in the day when it got when it was on the letterhead and seeing it move up the letterhead and make it to the next column. It was very exciting.

[Bruce Berman] (25:53 - 26:21)
Oh, sure. I know a lot of the partners there. I won't go into we won't go into that now, but they're a really fine, fine firm.

And I was retained when they lost the case, the Polaroid case, which went on for years. And they probably mitigated damages by hundreds of millions of dollars. Of course, you can't you know, how do you convey that?

That was part of my challenge. They mitigated hundreds of millions of damages, but they lost the case. And that's what people remember that they they represent.

[Henry Haddad] (26:21 - 26:42)
Well, look, I mean, it was a great I really enjoyed working there. I worked there up till ninety nine and then I went in-house at Shearing Plow. But I had a great experience.

I learned a lot. And frankly, the tools that they gave me and the Shagru firm as well, really were very helpful for when I went in-house in terms of the tools I needed to succeed there.

[Bruce Berman] (26:43 - 26:53)
Henry, you grew up in Brooklyn and you you're we talked about this a bit. You were a grandchild of Lebanese immigrants. But your your your uncle was an Oscar winner, was he not?

[Henry Haddad] (26:53 - 28:14)
He was a songwriter. Right. And also the performer.

But when he was in some movies, he would write songs for them. So the song Last Dance, you referenced earlier by Donna Summer, was in a somewhat interesting movie called Thank God It's Friday back in 1977, 78. But irrespective of that, it won best song for a motion picture.

But it also won Grammys and Golden Globes and People's Choices, as did a song that made event, which was in a Barbra Streisand movie the next year. Then they did a combination of duet of Barbra and Donna Summer doing a song called Enough is Enough. But interestingly, his most popular song was a song none of them wanted to do.

And Diana Ross wouldn't do it. And I spoke to a number of other acts who wouldn't do it. Sister Sledge at the time wouldn't do it.

And it was a song called It's Raining Men that he had written. He had co-written it with some help from Paul Schaefer, from David Letterman, pre Letterman. And they just created a band.

They created two women and they called them the Weather Girls. And that song is still a real crowd pleaser. Nearly every wedding or event I go to, I hear that song in Last Dance.

And it's really, really quite moving to me.

[Bruce Berman] (28:14 - 28:46)
That's a royalty, right? You can see the checks on that. Bristol Myers Square, I'll give you some opportunity here to talk a little bit about what you're doing.

It's known for its research, which in 2024, I believe it spent $11 billion on research. That's sizable by any measure. The company develops and manufactures innovative medicines for diseases in the areas of oncology, cardiovascular disease, and immunology.

Can you talk a little bit about some of its hits and misses, perhaps?

[Henry Haddad] (28:47 - 31:56)
I am so lucky and privileged to have been working here for the last 14 years and change. It is a company that is always, from the time I started, been focused on patients and getting treatments to diseases that are not being cured or not being met. These serious diseases like cancer, like heart disease, like autoimmune disease, now neuroscience, another area we're getting into, more dramatically.

We've taken some bold swings at different problems. The latest one now is Alzheimer's and schizophrenia in the neuro area. We were among the first companies, actually the first company to get approval of an immuno-oncology drug.

That first drug was called Yervoy. A guy named Jim Allison and MD Anderson, many years ago, this is going back to our initial discussion around academia, found that the CTLA receptor on certain immune cells, if you block it, then the cancer can't pretend it is not foreign effectively. In other words, the cancer has done a good job of surviving by tricking our immune cells into thinking, oh, nothing to see here.

Don't bother with me. But if you block that receptor, then the cancer can't do that. That was found to be an effective way for treating melanoma.

But for a variety of reasons, Yervoy was limited to certain types of diseases initially. But then the company licensed innovation that started at Kyoto University by Dr. Honjo. That was then licensed to a Japanese company, which we then licensed from them.

And that was the PD-1 receptor. And that was found to have a broader therapeutic window so that it couldn't be applied to many different cancers, including melanoma and lung cancer, head and neck, things I mentioned to you earlier. Cutting edge, unprecedented, no one had ever treated cancer that way before, right?

And what it led to was a revolution in the treatment of cancers because what started out with surgery and then radiation, right? Then we had chemotherapeutics, then immuno-oncology, and targeted medicine based on biomarkers. These are all creating situations where we're hopefully curing some cancers, but at the very least, we're hopefully extending the lives of people.

So they can have a higher quality of life and they can see big family events. But the goal is to keep on getting the next therapy and the next therapy. It's a bit like whack-a-mole because cancer is very smart.

It figures out a way to get around these things, and then we got to keep on keeping on in terms of therapies.

[Bruce Berman] (31:57 - 32:24)
Henry, can't one of the big national or all the big national government research and life science organizations, NIH, Pasteur, Max Planck, for example, can't they address some of these needs? I mean, there was some discussion during the COVID crisis that they could come up with these solutions. We didn't need to go to Pfizer or Moderna.

What's your thinking about that?

[Henry Haddad] (32:24 - 34:18)
There's a couple of comments. I remember many years ago, I was at a symposia at a law school, and one of the professors who I knew said, oh, it's an accident of history that private industry is the one sort of driving drug discovery and development, and the government could do it just as easily. And I wasn't even in Q&A.

I couldn't help myself. I stood up and I said to the person who I knew, I said, okay, give me one example where in the Soviet Union or in China, this ever happened. Just one.

Just one. Or in the United States. What is stopping that from happening?

You don't have to get rid of private industry for the government to say, okay, let's give this a try and let's see if it works. In fact, wouldn't you rather do that than get rid of one industry and then try it with government? It's never been done.

Because here's the thing. It takes the investment community to take bets on things which are a 15 to 20-year journey. How many times will politicians who have two, four, or six-year terms, when they're looking for budget for something near-term, say, ah, I will just pull that away from here because that's not going to happen for 15 years.

No one will blame me for the absence of therapies that never happened because of that. So there's good reason why the system that we have here today has driven these incredible therapies. And I think it's a great thing that the government cedes academic institutions to do some of that basic science.

And you see that we've taken licenses. Frankly, I'm not sure the patent system even warrants taking licenses to some of these early discoveries based on the 101 law we talked about earlier, Bruce.

[Bruce Berman] (34:18 - 34:21)
You don't even know what's patentable at that point.

[Henry Haddad] (34:21 - 34:50)
But I think the right thing for this company, not just this company, but for the industry and for the world, is to have a strong patent system and for us to have to pay license fees to those academic institutions. And I don't care if the government wants to take a piece from the academic institutions. That's between them based on how they're funding.

But my point is, let's keep that innovation engine going. Let's keep it driving forward because we're on the cusp of great, great things. And we can't stop now.

[Bruce Berman] (34:52 - 35:03)
Generative AI and machine learning have already had an impact on research, especially in How likely is AI to speed drug development and cut costs?

[Henry Haddad] (35:03 - 36:38)
Yeah, I think it already is. I think the jury is still out on how much cost it will cut. I think it's fair to say that there have been computer tools to help aid drug discovery for a library of compounds against a receptor, and you get 1,000 hits.

I'm just making this up here. And then based on your judgment, you get rid of 250 compounds and then use a computer tool, and it helps you get it down to 500. And then you do another assay, get you down to 250, and then use a computer tool.

So what we're doing here is human judgment all along the way. But these tools are assisting you in winnowing this down. And equally, if not more important, is the expense associated with clinical trials.

That's huge. Drug discovery is expensive, but this is huge. And if we can get a better hit rate, because you go through all this process and spend hundreds of millions of dollars to get a drug into the clinic to find out it doesn't work, or you have the wrong dosing amount or the wrong dosing regime.

There's so many things that can go wrong. So yeah, if we can get a better hit rate, that will be great. The thing we have to watch out for, though, Bruce, is that today, something that is solely invented by AI is not patent eligible.

[Bruce Berman] (36:39 - 36:41)
That's right. I was going to ask you about that.

[Henry Haddad] (36:41 - 37:35)
It's not. And yes, today, I would say human intent, human inspiration is part of these tools. You have to think, at some point, people are going to make that argument that there wasn't enough human innovation in this.

It was all computer. And therefore, you shouldn't have gotten a patent in the first place, right? That's going to chill further work in AI.

So we need to figure that one out. I personally think we need to either change the law or make sure that the way it's interpreted allows a simple and sole recognition of a problem being solved based on the tool you set up to be an inventive act. Either way, we don't want to be in a situation where we have a cure for cancer or heart disease and no one develops it because they can't get patent protection.

That would be a tragedy.

[Bruce Berman] (37:35 - 37:54)
That would be a tragedy, yes. In the past few years, China's progress in biotech has grown. Company shares for companies like Inogen Pharma are soaring.

What's going on in China and what are they doing that perhaps we're not?

[Henry Haddad] (37:54 - 39:32)
Yeah, I just actually was in Beijing less than a year ago and Shanghai as part of a delegation of IP folks in our industry looking at sort of talking about and advocating for continued encouragement of developing their IP system there. And I think they're committed to it. I think they'll do their version of it.

But I think there is a recognition by the government that some more meaningful period of intellectual property protection will inspire not only more startups there, and there's a ton of startups, a lot of folks that are working on different areas, but will allow multinationals to invest more in those startups and hopefully create a whole new generation of drugs. You know, I am agnostic as to where they come from as long as they're good and we get them approved for indications of serious need. So it would be great if we can get more innovation out of China.

And my hope is that they continue improving their patent system. Now, this is happening while I would say the US and the West are allowing our patent system to deteriorate a bit. Right.

There's still a gap. OK, I still would rather be under the US system than the Chinese system. But that gap is shrinking.

And at some point, China is going to do, as I've heard before, what's good for China. And they will continue encouraging their innovative engines. So on one hand, very positive.

But on the other hand, it should inspire the US to do better. That's what we need. We want a healthy, happy competition here to get the best drugs to the patients.

[Bruce Berman] (39:33 - 39:44)
What would you like to leave, Henry, with those watching or listening today? I mean, that was certainly a part of it. But if they remember one or two things from our conversation, what should that be?

[Henry Haddad] (39:44 - 41:17)
Yeah, Bruce. So first, let me thank you for the opportunity to speak to you and for what you're doing here, which is sort of shedding light on what is often a Byzantine and complex system. But I think what I'll leave you with is when you strip away the complexities of the legal framework that we've created on top of this, on top of that, it's very simple.

What do we want to incentivize and how do we fund it? And you can denigrate tech or biopharma or medical devices all you want. But if you shrink that pie in terms of revenue, you're going to shrink the R&D funding for it, and you're going to shrink the innovation for it.

So I think there's an open question as to how we address the different legal systems and what's the best way to do it. But we shouldn't lose sight of that North Star, that this is not going to just happen without a meaningful patent system. We need that patent system to be there, to be predictable, to provide some certainty that your investments will be recouped, and you can drive that back into the next R&D being generated by either private or public industry.

So, I mean, if I leave you with anything, the patent system is incredibly important. It's been a jewel of our economy for 200 years, and we need to foster it and make sure it's as strong as possible going forward. And where there are issues, let's address them, but let's address them surgically.

[Bruce Berman] (41:18 - 41:32)
Great. Thank you so much. We'll have to have you back on again, Henry, and tell us more about the work you're doing in IP education, which I find fascinating and very close to what CIPU is doing.

Thanks again.