The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1751-1348.htm

The case of
Patent management and the Siemens
globalization of firms: the case (1890–1945)

of Siemens (1890–1945)
Pierre-Yves Donzé
Osaka University, Osaka, Japan, and
Received 21 January 2021
Shigehiro Nishimura Revised 13 May 2021
Accepted 31 May 2021
Faculty of Business and Commerce, Kansai University, Osaka, Japan

Abstract
Purpose – The purpose of this paper is to discuss how multinational enterprises have historically managed
global patenting and to what extent the localization of patent management has supported the expansion of
these enterprises. This study focuses on the electric appliance industry (one of the first industries to see the
emergence of global companies) and consider the case of Siemens, a German multinational company,
comparing it to General Electric (GE), an American company.
Design/methodology/approach – The work adopts a global business history approach. Taking GE’s
global patent-management model, described by Nishimura (2004, 2009, 2016), as the benchmark, this study
analyzed Siemens’ worldwide control of its intellectual property rights between 1890 and Second World War,
using German, Japanese and American primary sources.
Findings – Patent management is a common means for firms to globalize and transfer technology
internationally, but it can take various forms. While GE transferred patent management to its foreign
subsidiaries (a process known as localization), Siemens kept worldwide patent management at its
headquarters – except in Japan, where in time it transferred this activity to a joint venture. The transfer of
production called for localization of patent management while focusing on exporting to other markets made it
possible to keep patent management at headquarters.
Originality/value – Patents are usually a source for quantitative surveys. This paper uses them to discuss
how multinational companies manage property rights globally. It is the first paper to address this issue by
comparing two major actors in a similar industry.
Keywords Knowledge transfer, Globalization, Patent management, General electric, Siemens,
Patent management
Paper type Research paper

1. Introduction
Intellectual property rights (IPR) play a significant role in the global expansion of firms.
Pioneering studies in international business have argued that the acquisition of foreign
intangible assets such as patents and brands was the first big step in the making of
multinational enterprises (MNEs) (Dunning, 1981; Hymer, 1976). However, for decades,
international business and business history have debated the nature of the relationship
between foreign direct investment (FDI) and IPR. Most scholars, since Mansfield (1995),
agree there is a strong correlation between IPR systems that protect the assets of firms and
the level of FDI. The receipt of patent protection encourages foreign firms to invest in a
country and transfer its production facilities (Adams, 2010; Seyoum, 2006). More recently,
Journal of Management History
© Emerald Publishing Limited
1751-1348
This work was supported by a JSPS Grant-in-Aid for Scientific Research, (B) 19H01512. DOI 10.1108/JMH-01-2021-0002
JMH Saiz and Castro (2017), using Spain as a case study and taking a long-term perspective, have
revealed a strong relationship between FDI and IPR. At the same time, these authors have
also shown that weak or non-existent IPR (such as in The Netherlands and Switzerland at
the end of the 19th century) does not prevent foreign companies from investing in a country.
Other scholars have not noted any real impact of IPR on FDI (Boldrin and Levine, 2008;
Nagaoka, 2009; Nicholson, 2007). Hence, Saiz and Castro (2017, p. 39) suggest that the
implementation of IPR is not a condition for FDI but the outcome of the globalization of
firms. As MNEs expanded throughout the world, they needed an international system that
would protect their brands and patents – this system was set up in Paris in 1883.
However, these studies are based on quantitative data and do not discuss how MNEs
organize and manage their extension into foreign countries. The accessibility of historical
data concerning patents makes them an attractive source to discuss innovation, economic
development and globalization (Cantwell, 1995; Chang, 2001; Fontana et al., 2013). Yet, few
business historians go over the quantitative analysis and focus on the management of IPR
from a global perspective, even though various strategies use this perspective. For example,
companies have created patent pools or even cartels to share their knowledge and control its
international diffusion. Other companies do not go abroad by themselves but find local
partners in other countries to whom they give access to their patents, a system widely used
during the interwar years by international cartels in, for example, the aluminium and rayon
industries (Bertilorenzi, 2015; Cerretano, 2013). As for Budde-Sung (2021), she demonstrated
that the absence of a global IP strategy by a company can lead to the emergence of
competitors outside its home country.
Organizational studies have clarified the relationship between knowledge management
organization, including the management of IPR and corporate performance. Integrating
research and development (R&D), legal and utilization within a firm and linking various
functional units lead to competitive advantages (Grandtrand, 1999; Reitzig and Puranam,
2009). In addition, previous studies demonstrated that internalizing and linking patent
applications and related activities effect IPR protection (Reitzig and Puranam, 2009; Reitzig
and Wagner, 2010) and that establishing organizational capabilities for knowledge
management makes a firm profitable (Teece, 2000). However, it is necessary to consider
what kind of organizational capability needs to be built locally and how to form an IP value
chain (Reitzig and Wagner, 2010) between the head office and the local organization, when a
company expands its business across national borders. Some scholars in international
business have also demonstrated that patenting was a particular codified form of knowledge
that does not include all kinds of know-how transferred across borders (Bresman et al.,
1999). The presence of expat engineers and managers is also a major channel for the
introduction of tacit knowledge in foreign subsidiaries (Vlajcic et al., 2019). In this paper, we
focus however on organizational facilities implemented for international IP management.
Furthermore, it must also be considered whether there are differences in global knowledge
management organizations depending on the global business strategy, namely export and/
or local production. This issue is precisely discussed in this paper through two companies,
namely, General Electric (GE) and Siemens, which adopted different internationalization
strategies, this first focusing on FDI and the second on export (Wilkins, 1974; Feldenkirchen,
2000).
Companies that moved their production facilities abroad had different options for
managing IPR – they could use local patent agencies to apply for domestic patents. Most
scholars who have studied these agencies argue that they contributed to a market for ideas
and technology through supporting patenting for individual inventors (Khan, 2013;
Lamoreaux and Sokoloff, 2003; Nicholas and Shimizu, 2013). These agencies were also the
gateway to local markets for global companies, as in Sweden (Andersson and Tell, 2016). The case of
Another way to protect IPR was to internalize this function within the firm. In this case, Siemens
companies had to face a decisive choice: should they control global patent management from
their headquarters or move this task to local subsidiaries abroad? The question is important
(1890–1945)
because it relates to the way companies not only manage IPR but also organize technology
transfer and R&D – as shown by Nishimura in the case of American MNEs in the electric
appliances industry (Section 2).
Hence, this article aims to contribute to a better understanding of the way MNEs have
adapted global patent-management policies, as well as how these policies have supported (or
not) the enterprises’ extension into foreign markets. We take the example of the electric
appliance industry here because it was one of the first manufacturing sectors to organize
globally (Hughes, 1983; Chandler, 1990). The roots of this industry go back to the mid-19th
century and the application of electricity for various needs, mainly lighting (light bulbs),
communication (telegraph) and transportation (streetcars). Technological convergence led to
the development of a wide variety of goods. At the same time, the production of electricity
(power plants) became a major target for R&D. Electric appliances and equipment was thus
a science-based, capital-intensive industry. Organic growth, based on product
diversification and mergers and acquisitions (M&A) led to the emergence of a handful of
large companies that dominated the global market. The most important companies were
General Electric (GE, founded in 1892 by the merger of Edison GE Company and Thomson-
Houston Electric Company) and Westinghouse Electric (1886), in the USA, Siemens (1847)
and Allgemeine Elektricitäts-Gesellschaft (AEG, 1883) in Germany and Koninklijke Philips
N.V. (1891) in The Netherlands. All of these firms adopted a variety of strategies to expand
internationally, from exporting and licensing to foreign direct investments and were the
promoters of the first globalization of manufacturing (Jones, 2005). Protecting their
innovations through patents was central to their international activities.
Using the German multinational company Siemens as a case study, we focus on its
strategy concerning the Japanese market where its rival, GE Company, has implemented an
innovative strategy for localizing IPR management (Section 2). Although these two
companies are known to have adopted to different internationalization strategies (FDI vs
export), the high competitiveness and the importance of the Japanese market led Siemens to
transfer production to this country during the 1920s. Japan offers consequently an excellent
opportunity to discuss the evolution of two international IPR management strategies that
differed drastically at the beginning of the 20th century.
The paper consists of five sections. After this introduction, Section 2 outlines what we
know about patent management by MNEs in the electric appliance industry, with particular
attention given to GE. Section 3 discusses the evolution of patent management at Siemens
and Section 4 shows, as an example, how Siemens manages patenting in Japan. Finally, the
conclusion presents and discusses the results of this research in Section 5.

2. Patent management by multinational companies: General Electric as a

benchmark
The Paris Convention for the Protection of Industrial Property, signed in 1883, set a
condition that MNEs could apply for patents in foreign countries and secure protection for
their inventions. Although the modern patent system had already been set up in several
nations, beginning in England in 1624 with the Statute of Monopolies, it was uncertain
whether MNEs could get industrial property protection in a foreign country at the same
level as in their own country. Parties to the Paris Convention confirmed the principles of
equality and priority. The principle of equality between nationals and foreigners means that
JMH citizens of a treaty member country can obtain patents in other member countries under the
same conditions. Under the principle of priority, the first filing date for a treaty member
country is considered the filing date for other treaty member countries within a certain
period and the first applicant is not disadvantaged even if a patent for the same invention is
applied for later in another member country (Donzé, 2013a; Penrose, 1951).
On the one hand, these two principles increased the predictability of industrial property
protection in foreign countries and promoted international patenting by MNEs. On the other
hand, even if the number of member countries of the Paris Convention increased and the
international patent application system expanded worldwide, patent law remained
independent in each country. For example, French legislation required patentees to
manufacture in France while German law required patentees to implement a patent within
three years of registration and supply enough products to the market (Hughes, 1983; Swope,
1972; Wilkins, 1970). Spain had a patent system for importing technology and the patentees
had to implement the patents within one to three years (Saiz and Castro, 2017, p. 876).
Furthermore, considering the actual use of patents locally, there was considerable diversity
in the competitors and the market environment, depending on the country. Such an
international patent system forced MNEs not only to file patents in each country but also to
manage local patents. The problem faced by MNEs was how to combine globalization and
localization of patent management (the balance between centralized control by headquarters
and decentralized management by foreign subsidiaries).
Companies from the electrical industry were among the largest users of the new
international patent system. In this sector, technology had developed rapidly from the latter
half of the 19th century and had diffused worldwide, starting with the electric light system.
MNEs had brought about global technology transfer and, as a result, electrification had
progressed (Hausman et al., 2008). When MNEs developed their electrical business abroad,
they had, of course, applied for patents in foreign countries.
GE’s globalization and localization of patent management marked a watershed in this
industry. Through globalization and localization, GE developed its international business
by taking minority stakes in electrical companies in major industrialized countries rather
than setting up wholly-owned subsidiaries (Wilkins, 1974). GE’s overseas patent-
management method was to manage local patents through the partner companies in which
it invested.
In 1894, GE organized the joint venture British Thomson-Houston (BTH) with local
capital and secured 40% capital stock, signing a patent agreement with BTH in 1897. The
agreement specified the exclusive territories of both companies (British Empire for BTH and
North America for GE) and supported the exchange of patents and inventions owned by
both companies in mutual territories (Nishimura, 2009). From the viewpoint of patent
management, BTH applied for patents for GE inventions in the UK and managed them, and
GE applied for patents for BHT inventions in the United States and managed them. This
was the system GE set up to manage local patents through affiliated companies. GE also
transferred patent management to local companies in France (1892) and Germany (1903)
(Nishimura, 2009, p. 84; Wilkins, 1974, pp. 54–58).
In Japan, however, GE adopted a different strategy. While it acquired patents and made
capital investments in two local companies (Tokyo Electric in 1905 and Shibaura
Engineering Works in 1909), the patent agreement between GE and these companies only
stipulated granting technology and patent licenses, not leaving it to local patent
management, as BTH did. GE appointed a well-known patent attorney, Seiichi Kishi, as an
agent in Japan to take charge of local patent management under the direct control of the
head office. By 1918, GE had registered 236 patents in Japan (Nishimura, 2016, pp. 44–46).
 By the end of World War I, GE’s local patent management in Japan had changed The case of
drastically. In 1919, the US company signed new patent agreements with its two partners in Siemens
Japan that were like the contracts with BTH. To implement these contracts, Tokyo Electric
and Shibaura formed patent departments and began filing GE patents from around 1921
(1890–1945)
(Nishimura, 2004). The number of GE patents and utility models filed and registered
between 1919 and 1938 was considerable: 1,403 for Tokyo Electric and 2,106 for Shibaura. In
1939, the two companies merged to become Tokyo Shibaura Electric Company Ltd (later
Toshiba). However, the new company exceeded the contracts of its predecessor companies –
it applied for and registered 754 GE inventions. In total, there were 4,263 GE patents
managed by Japanese partners [1].
The transfer of patent management to foreign-affiliated companies allowed GE to adapt
to local conditions. It notified local firms of GE inventions; however, the local firms applied
for necessary patents only and decided whether to keep or abandon the patent rights, at
their own expense, considering the costs and benefits (Nishimura, 2004, pp. 117–118). By
incorporating local affiliated companies’ patent departments as part of its global patent
management, GE built a reasonable patent portfolio globally at a low cost. Moreover, this
framework supported large-scale technology transfer to partner companies, offering a basis
for their growth – as embodied by Toshiba, which built its technological foundations in this
context before becoming a global player after Second World War. GE was hence a first
mover in global patent management.

3. Organizing patent management in Siemens

The German MNE Siemens was one of GE’s main competitors in world markets during the
first part of the twentieth century. Siemens’ expansion was also based on intensive R&D and
foreign sales. Hence, protecting innovation through patents was a major issue after the first
years of Siemens and Halske (S&H) (Von Weiher and Goetzeler, 1977; Feldenkirchen, 2000).
Werner von Siemens received his first patent in 1842, five years before setting up his
company [2]. During the following decades, he received patents from the Prussian
government and, after the unification of Germany, he promoted the introduction of patent
law (Fischer, 1922). The company also had to protect its innovations abroad when it opened
factories in Russia, the UK and Austria before 1880 (Chandler, 1990, p. 464). However,
individual engineers and managers in the various works of the conglomerate. There was no
specific organization to oversee this task until the 1890s.
The creation of a patent-management unit arose from the need to centralize and
coordinate various administrative tasks within S&H, as it had developed into a large and
diversified conglomerate (Feldenkirchen, 1995). In 1890, it set up a central office to
coordinate various administrative tasks, including patent application and management [3].
Seven years later, in 1897, it set up the Central Patent Office (CPO). The number of patents
the company was handling was growing fast, from an average of 12 patents a year from
1883 to 1887 to 130 in 1899, and this made it necessary to have direct control of this activity [4].
The CPO controlled patenting for all the company, except three workshops that kept their own
patent office (Berliner Works, Charlottenburg Works and Railway Division) [5]. Besides, some
of the companies founded with Siemens after 1900 had autonomous patent management.
From 1899, Ludwig Fischer, an engineer and graduate in philosophy who entered S&H in
1893, directed the CPO [6]. Fischer made patent management efficient by introducing
standards and statistical control of the various operations of the CPO. His ideas on patent
management are in his book, The work of the patent engineer, published in 1923 (Fischer,
1923).
JMH The CPO not only applied for patents but coordinated patent management with those
subsidiaries that had their own office, particularly the joint venture Osram and international
cartels. The CPO soon became a large organization. At the time of its foundation, in 1897, it
employed only five staff among whom there was just one engineer [7]. It then experienced fast
growth, with 81 employees (15 patent engineers) by 1911 and more than 200 after 1928 [8].
The number of patents filed by the CPO rose from 546 in the fiscal year 1903–1904 (59%
foreign patents) to 5,061 in 1928 (56% foreign patents) [9].
Despite the importance of foreign activities, Fischer did not show any interest in the
internationalization of patent management, as did GE at the same time. His aim was the
opposite: to wield centralized control over patenting throughout the conglomerate. Until
1910, the organization of patenting abroad was not completely clear, but the statistics in
1903–1904 reveal that both the CPO (160 patents) and Siemens’ foreign-affiliated companies
applied for patents (163 patents) [10]. In 1911, an organizational chart of CPO divided the
organization into seven groups – six relating to various major technologies and the seventh
to foreign affairs [11]. This suggests that patent protection around the world was a crucial
concern for Siemens. Another vital issue was cost control. The total expenses of the CPO
amounted to about one million Deutschemark (DM) per year in the 1920s and Fischer
determined to make foreign activities less costly. The decision to apply for a patent, or to
extend patent protection, in certain countries had to be made in the central office because of
the cost of such operations and the expected profitability of inventions and products
patented [12]. Such a policy did not allow autonomy to foreign subsidiaries. Hence, Siemens
did not transfer patent management or organization to its branches and companies abroad –
it made the decisions in Berlin and applied them through local, independent patent
attorneys.
After First World War, however, the growing number of stakes taken in foreign
companies and joint ventures created abroad challenged the centralized patent management
Fischer had organized [13]. When innovation occurred in these companies, it became an
issue to decide who had the power to apply for patents and where to do it. There was no
general principle guiding this decision, with Siemens adopting a case-by-case policy. We
analyze below the case of Japan.

4. Siemens patent management in Japan

4.1 Development of local manufacturing business
Moving the production of electrical appliances to Japan became a major undertaking at the
beginning of the 20th century. The growing importance of the Japanese market and the rise
of custom tariffs had led all the major companies in the industry to invest in this country, as
shown above with the example of GE (Mason, 1992). Hence, Siemens had no choice but to
move part of its production to Japan (Kirchberg, 2010; Siemens, 1987; Takenaka, 1991, 2009).
It had had an office in Tokyo since 1887 and in 1905 transformed it into a sales subsidiary
under the name Siemens-Schuckert Denki KK (hereafter Siemens Japan). The competition
from US multinationals in Japan led Siemens to create a joint venture company with the
zaibatsu Furukawa in 1923, under the name Fuji Electric [14].
Siemens transferred its electric machinery business to Fuji Electric, but not all its
products were locally manufactured straightaway. A new factory was built and started
operation in 1924, under German management (Fuji Electric Co. Ltd, 1957). Siemens
gradually began to transfer production to Japan, including automatic telephone switches
(1933), telephone amplifiers (1934) and carrier-frequency equipment (1935). In 1935, Fuji
Electric spun off the expanding telephone equipment business to set up Fuji Tsushinki
Manufacturing Company Ltd (later Fujitsu) (Fuji Tsushinki Manufacturing Company Ltd, 1964;
Kudo, 1992). Moreover, in 1923 and 1937, Siemens directly assigned license contracts to produce The case of
long-distance telephone cables with Furukawa Electric (Fuji Tsushinki Manufacturing Siemens
Company Ltd, 1964).
Consequently, Fuji Electric developed rapidly during the interwar years, characterized
(1890–1945)
by growing autonomy from the German parent company. Udagawa (1987) showed that the
share of made-in-Japan products in Fuji Electric’s gross sales went from 6.4% during the
second semester of 1925 to more than 90% in 1933. This domestic production included
mostly German goods manufactured in Japan. However, there were also improvements and
R&D conducted in this company, which led to innovations and the need to protect them.
Documents conserved in Siemens’ archives in Berlin show clearly that Fuji Electric informed
headquarters about these innovations and the patent applications in Japan, emphasizing
that “if you have an interest in that, we recommend you register this patent in Germany” [15].
It was, however, a rare case, as most of the technology flew from Germany to Japan, not the
opposite way.

4.2 Organizing patent management

Until 1923, patent management in Japan followed the general organization Fischer had set
up in Berlin. German headquarters decided which patents to protect in Japan and it applied
through Siemens Japan, which employed a German engineer who specialized in this activity.
Japan was the only country in the world where Siemens had internalized the patent-
management function, rather than applying it through independent patent attorneys.
Siemens filed and registered 42 patents between 1904 and 1916 [16]. The agents of these
patents give insight into how the patents were processed and managed. Tsunematsu Kume,
an independent patent attorney Siemens commissioned, made the largest number of
applications (20). Other agents included Max Wolff (4), a Siemens engineer who registered as
a patent attorney in Japan in 1908 [17] and who was the co-owner of Siemens Japan until his
departure in 1911 (Takenaka, 1991, p. 78), and Hermann Kessler (1), who came to Japan to
open the Siemens Tokyo office in 1887. Kessler was also registered as a patent attorney in
1899 and represented the company in Japan until 1908 [18]. The engineers dispatched from
German headquarters to Japan had patent attorney qualifications. They applied for and
acquired patents in Japan that were notified by German headquarters, but application
processing was mostly outsourced to an external patent firm.
After First World War, Siemens Japan began organizing patent management. In June
1920, Arthur Kessler and Rokurota Momotani set up a patent department in Siemens Japan,
headed by Momotani, which internalized the processing of patent applications entrusted to
Kume so far (Momotani, 1955, p. 34). To conduct local production in Japan, it was necessary
to register and manage patents and utility models both locally and systematically. When
Fuji Electric was set up, it became necessary to decide with Furukawa how to manage IPR
in this joint venture [19]. As a result of negotiations, an additional memorandum stipulated
that “the patents shall be registered in the name of Siemens, be [in the] possession of
Siemens and the expenses for the registration and maintenance of the same are to be borne
by the new company” [20]. Namely, Siemens agreed to give the joint venture the right to
decide which of its patents had to be protected in Japan, taking into consideration the
possibility of using the technology involved in it and the cost of IPR protection. Indeed, Fuji
Electric had to take charge of all the expenses related to patent management in Japan.
Siemens kept the right to make Fuji Electric apply for certain patents in Japan [21].
Although Fuji Electric could choose an application patent, it did not have a patent
department for a while. Siemens Japan’s patent department was still in charge of patent
management for both Siemens and Fuji Electric. However, in 1927, Siemens Japan transferred
JMH this patent department to Fuji Electric. Matsuji Takahashi, an engineer and qualified patent
attorney, became its manager (Momotani, 1955, p. 34). The Fuji Electric patent department
became autonomous, as were GE’s foreign subsidiaries. Siemens adopted the same patent
strategy as its rival in Japan. This regime continued until Second World War.

4.3 Localization of patent management: quantitative data

This section discusses Siemens’ patent management in Japan between 1920 and 1944, based
on a quantitative analysis of patents and utility models filed and registered in the name of
Siemens or its subsidiaries. Siemens used parent companies (S&H and SSW), affiliated
companies specialized in patent management outside of Germany (Patent Verwertungs
Gesellschaft GmbH Hermes and Fides Gesellschaft für die Verwaltung und Verwertung von
Gewerblichen Schutzrechten GmbH) and various subsidiaries such as SRW, SAM and
Gesellschaft für Electrische Apparate GmbH. Figure 1 shows patents and utility models
filed between 1920 and 1944 and then registered, based on the year of application. During
this period, Siemens filed and registered industrial property rights in Japan for 2,606 patents
and 979 utility models, for a total of 3,585 cases. As we have seen, GE had 4,263 patents and
utility models registered in Japan between 1919 and 1942, so Siemens’ quantity of industrial
property was comparable to GE’s. This figure also reveals that the number of applications
increased in the latter half of the 1920s and decreased in the first half of the 1930s, but in the
latter half of the 1930s, 200 to 250 applications were filed annually.
A comparison of Siemens’ patents registered in Germany and Japan makes it possible to
evaluate technology transfer within the firm and its degree of globalization. Siemens filed a
total of 19,229 patents in Germany between 1920 and 1940. [22] For all this period, it filed
16.7% of its patents in Japan, with a general increase over the years – less than 10% in
1921–1925 and an average of 18.7% in 1926–1940 (Table 1).
A comparison of this ratio with GE makes clear a stronger technology transfer in the case of
the American multinational. On average, 32.3% of GE patents were registered in Japan from
1920 to 1940, and 35.8% from 1926 to 1940 (Nishimura, 2016, p. 154). Notably, this difference
results from Siemens having more patents in its home country during this period than had GE
(19,229 against 12,317); however, the ratio shows a lower technology transfer to Japan, which
confirms the strategic choice of German MNEs to give priority to export (Plumpe, 2016).

300

250

200

150

100

50

Figure 1. 0
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944

Patents and utility

models registered by
Siemens in Japan, Source: JPO, Official Gazette; patent and utility model
1920–1944
specifications
 (No. %)
The case of
Year German patents (a) Japanese patents (b) Ratio (b/a) Siemens
(1890–1945)
1920 273 53 19.4
1921 390 19 4.9
1922 430 33 7.7
1923 412 20 4.9
1924 498 41 8.2
1925 685 62 9.1
1926 873 121 13.9
1927 931 159 17.1
1928 972 197 20.3
1929 1,310 165 12.6
1930 1,517 256 16.9
1931 1,367 180 13.2
1932 1,088 155 14.2
1933 1,009 168 16.7
1934 1,002 228 22.8
1935 1,023 133 13.0
1936 1,222 278 22.7
1937 1,233 251 20.4
1938 1,309 221 16.9
1939 1,008 232 23.0
1940 677 246 36.3
Table 1.
Total 19,229 3,218 16.7
Siemens patents in
Note: The number of Japanese patents includes that of utility models Germany and Japan,
Source: Figure 1 1920–1940

Next, the survey of patent agents used by Siemens highlights the patent management of
this company. Table 2 shows Siemens’ 3,585 Japanese patents and utility models, sorted
by agent and arranged by application year. The table also shows that several
organizations managed Siemens’ Japanese patents. The first was the patent department
of Siemens Japan, whose staff (Rokurota Momotani, Kiyoshi Ishikawa, Reijiro Baba and
Matsuji Takahashi) filed Siemens’ patents in Japan from 1920 to 1927. The second was
the patent department of Fuji Electric. As mentioned above, Siemens Japan’s patent
department was transferred to Fuji Electric in 1927 and headed by Takahashi. After
1927, this department processed numerous patent applications for the company. The
third was Reijiro Baba, who was originally a member of Siemens Japan’s patent
department. He worked for Furukawa Electric and filed patents for Siemens’ cable and
wire-related inventions from 1932 to 1940. The fourth was Seiichi Ishikawa, who
managed the patent department of Fuji Tsushinki, a subsidiary of Fuji Electric. From
1936, Ishikawa filed Siemens’ telephone-related patents. The fifth consisted of patent
attorneys working in companies not related to Fuji Electric, such as Hiroshi Takimoto
(Sumitomo Electric Industries), Rinjiro Shimizu (Nippon Electric Company, NEC) and
Mitsuo Takefuji (Japan Radio Company). Siemens concluded technical contracts with
those companies and outsourced patent applications to them. Finally, there were
external patent attorneys such as Karl Vogt. Vogt acted especially for SRW, a Siemens
subsidiary that had a contract with Goto Fuundo for the local production of X-ray
equipment. These data show that Siemens centralized patent management in its
subsidiary (Siemens Japan) and main joint venture (Fuji Electric), but with exceptions
made for specific technology transferred to specific local firms.
 1940
JMH

Table 2.

number of
Siemens in Japan,

applications, 1920–
Patent attorneys of
External
Siemens Japan’s patent department attorneys In-house attorneys other than Fuji
Rokurota Kiyoshi Reijiro Matsuji Seiichi Karl Reijiro Hiroshi Rinjiro Mitsuo Not
App. Y Momotani Ishikawa Baba Takahashi Ishikawa Vogt others Baba Takimoto Shimizu Takehuji available Total

1920 8 45 53
1921 3 16 19
1922 32 1 33
1923 5 15 20
1924 40 1 41
1925 7 48 7 62
1926 61 57 3 121
1927 5 152 2 159
Fuji Electric and Fuji Tsushinki’s patent dept.
1928 195 2 197
1929 163 2 165
1930 253 3 256
1931 176 1 3 180
1932 150 3 2 155
1933 159 1 1 6 1 168
1934 219 1 8 228
1935 130 1 2 133
1936 242 33 1 2 278
1937 146 94 11 251
1938 121 58 16 26 221
1939 128 36 13 55 232
1940 139 32 3 1 2 69 246
1941 202 21 1 6 230
1942 64 16 80
1943 55 55
1944 2 2
Total 48 62 114 2,761 290 10 11 45 6 2 2 234 3,585

Source: Figure 1
 Patents Utility models (No. %)
The case of
Publication/ Existing as Existing as Siemens
Year Duration Registration of 1947 Ratio Duration Registration of 1947 Ratio (1890–1945)
1932 15 93 15 16.1
1933 14 99 36 36.4
1934 13 96 47 49.0
1935 12 100 40 40.0
1936 11 118 42 35.6
1937 10 114 51 44.7 10 51 11 21.6
1938 9 100 44 44.0 9 68 35 51.5
1939 8 127 68 53.5 8 86 36 41.9
1940 7 208 111 53.4 7 108 67 62.0
1941 6 154 109 70.8 6 63 42 66.7
1942 5 118 95 80.5 5 40 31 77.5
1943 4 122 112 91.8 4 49 46 93.9
1944 3 114 109 95.6 3 54 53 98.1
1945 2 13 12 92.3 2 12 12 100.0
1946 1 20 20 100.0 1 9 8 88.9
Table 3.
Total 1,596 911 57.1 540 341 63.1 Siemens patents and
utility models in
Source: Figure 1 Japan, 1947

To measure the quality of patents and utility models registered by Siemens in Japan, we
have calculated the proportion of these property rights maintained over the years. Indeed,
during the time of legal protection, companies had to pay an annual fee (15 years for patents
and 10 years for utility models) [23]. Hence, when a patent or utility model was considered
useless, the company stopped paying for them. The list of existing Siemens Japan patents
and utility models made by Fuji Electric after the end of World War II makes it possible to
calculate the proportion of property rights maintained over the years, and hence the quality
of patenting in Japan [24]. The number of properties managed by Fuji Electric in June 1947
was 1,252 (Table 3). It included 911 patents and 341 utility models. The existing ratio at that
time amounted to 16.1% for patents registered in 1932 (maturity of the protection), 44.7%
for 10-year-old patents and 80.5% for five-year-old patents. For utility models, survival rates
were 21.6% for 10-year-old models (maturity period) and 77.5% for five-year-old models.
To evaluate the meaning of these rates, we compared them with similar figures
calculated in other studies. Degner and Streb (2014, pp. 19–23) showed that about 70% of
patents registered in Germany between 1891 and 1907 were abandoned within five years,
10% lasting more than 10 years and 4.7% lasting 15 years. Based on those statistics, they
argued that any patent that had survived for more than 10 years was a “valuable patent”
(p. 36). Saiz and Castro (2017, pp. 876–878) showed that only 19.4% of all German patents
filed from 1820 to 1939 in Spain were implemented and only 10.5% survived six years or
more. On the one hand, Germany and Spain had compulsory enforcement regulations that
required the patentee to implement the patent within a certain period of its registration and
such an operation was not conducted in Japan. On the other hand, even if some Japanese
patents were not implemented, they might have been kept for cross-licensing patent
agreements or defensive patents against competitors. Despite these reservations, Siemens
Japan’s patent and utility models survived for quite some time.
Siemens registered only 16.7% of its patents and utility models in Japan, but these
industrial property rights were a selection of valid innovations, enabling it to build a strong
patent portfolio. One of the reasons for this was the well-organized local patent
JMH management: Fuji Electric selectively applied for and kept those Siemens’ patents that were
suitable for market competition. Second, at the application in Japan, Siemens made full use
of the merits of priority. Under the priority stipulated by the Paris Convention, it was
sufficient to apply to Japan within one year of the filing date in Germany, so Fuji Electric
was able to use the period to carefully select the necessary inventions before application.

5. Conclusion
This research on the patent-management strategy Siemens implemented during the years
1890–1945 reveals a model different from GE’s. The US multinational GE transferred early
patent management in its foreign subsidiaries and joint ventures to strengthen localization
of production and adaptation to national specificities. Siemens kept strong control over
worldwide patenting from its headquarters. This difference in the management of
intellectual property between the two firms expresses the different modalities of
internationalization generally adopted by German and American companies. In 1927,
however, Siemens Japan transferred patent management to Fuji Electric, a joint venture in
which it had a minority stake of 30% (Udagawa, 1987, p. 19). This was an exception that
resulted from Siemens’ gradual transfer of production to this company. Outside Japan, the
Berlin headquarters kept control of patents, as the company focused more on export and
international cartels than FDI, unlike its American rival. Global patent management
followed, hence, the globalization strategy of the firm (export versus local production).
The main implication of this paper is that the localization of production by MNEs led not
only to technology transfer (learning to make goods) but also to knowledge transfer
(learning to protect IPR). Moreover, the transfer of knowledge (in this case patent
management) promoted the localization of production. This, in turn, encouraged foreign
subsidiaries to conduct R&D and apply for patents by themselves.
Second, a company needs to organize knowledge management in the host country, if it
extends business beyond the borders. Establishing organization capabilities locally is to
transfer the technology of the home country to a local business entity on a large scale and
appropriately, and to make a profit under the condition that the market and the social
technology system are different in each country. In addition, the IP value chain and its
organization built between the head office and the local business entity differs depending on
whether the form of the international business was export-oriented or local production.
Siemens basically preferred exports from Germany and managed global patents at the head
office, but exceptionally when it entered the local production in Japan, it established
organizational capability in the joint venture Fuji Electric to exploit their knowledge locally,
like GE that exploited through affiliated companies.
This article is exploratory research on the globalization of knowledge transfer through
IPR management, based on a comparison of the two largest multinationals of the electric
appliance industry: Siemens and GE. Further research is, however, necessary to refine our
findings. Industries in which companies conducted R&D internationally from an early stage,
like the chemical industry, is an obvious target.

Notes
1. (Nishimura 2004, pp. 121, 127, 229) There were 54 other patents filed and registered in the names
of GE and its subsidiary International General Electric Company. These were the patents related
to movie-related equipment that had not been contracted with Tokyo Electric and Shibaura
Engineering Works (ibid., pp. 131–4).
 2. Archives Siemens, Berlin (ASB), 68 Li 239, Werner Roloff, Ein Beitrag zur Geschichte der The case of
Patentabteilungen des Hauses Siemens für die Zeit bis zum Jahre 1948, 1981, p. 8, and Ludwig Siemens
Fischer, Werner Siemens und der Schutz der Erfindungen, Berlin: Julius Springer, 1922. (1890–1945)
3. ASB, 68 Li 239, p. 12.
4. ASB, 12 Lp 839, Ludwig Fischer, Bericht über meine Dienstliche Tätigkeit, 1899–1934, undated, p. 6.
5. ASB, 68 Li 239, p. 13.
6. ASB, 68 Li 239, Anlage 11.
7. ASB, 12 Lp 839, Ludwig Fischer, Bericht über meine Dienstliche Tätigkeit, 1899–1934, undated, p. 44.
8. Ibid., pp. 46–47, 63.
9. ASB, 68 Li 239, Tätigkeit des Central-Patentbureaus im Geschäftsjahr 1903/04 and Die Kosten
der Patentabteilung, 11 October 1928.
10. ASB, 68 Li 239, Tätigkeit des Central-Patentbureaus im Geschäftsjahr 1903/04.
11. ASB, 68 Li 239, Geschäftseinteilung der Patent-Abteilung des Siemens-Konzern, 1911.
12. ASB, 68 Li 239, Die Kosten der Patentabteilung, 11 October 1928.
13. Wilfried Feldenkirchen, Siemens, 1918–1945 (Columbus, 1995).
14. ‘Memorandum between Furukawa and Siemens,” 1 June 1921 and 20 August 1923, RG 331, BOX
9947, National Archives Record Administration.
15. ASB, 886, Letter from Fuji Electric to Siemens, 11 March 1930.
16. Japan Patent Office, Official Gazette; Patent and utility model specifications. The names of
patentees were S&H, SSW, Siemens Brothers (UK), Siemens Brothers (Germany) ‘Gousi geisha
siimensu kyodai shokai,’ and SSDKK.
17. Tokkyo kyoku [Patent Office], Meiji 44 nen 3 gatsu 31 nichi genzai Tokkyo benrishi meibo
[Patent attorney list as of 13 March 1911] (Tokkyo kyoku [Patent Office], 1911), p. 33.
18. Patent Office, Patent attorney list as of 31 March 1911, p. 8; Benrishi Kai [Patent Attorney
Association], Benrishi seido 100 nen shi [One-hundred-year history of the patent attorney system]
(Tokyo, 2000), pp. 22–23. H. Kessler was one of the first 138 patent attorneys when the Patent
Attorney Act came into force.
19. ASB, 17967, contracts between Siemens and Furukawa, 1 June 1921 and 13 February 1931.
20. ‘Memorandum between Furukawa and Siemens.’
21. ASB, 44 Le 967, minutes of a meeting, 25 April 1923.
22. German patents were searched using DEPATISnet. From patent type code A (published patents)
filed between 1920 and 1940, we extracted patents filed by the Siemens Group (including patents
shared with other companies). The companies of the Siemens Group only take up what has
become the name of the Japanese patent, namely, S&H, SSW and Gebrüder Siemens, Siemens
Bauunion GmbH, Siemens Reiniger Veifa, Siemens Reiniger Werke, Siemens Apparate und
Maschinen, Siemens Elektro, Osmose GmbH, Siemens Lurgi Cottrell Elektrofilter, Zwietusch E.
& Co. GmbH, Luftfahrtgerätewerk Hakenfeld.
23. Patent Law, Government Printing Office, Official Gazette, No. 2622, 30 April 1921, pp. 940–
1; Utility Model Law, Government Printing Office, Official Gazette, No. 2622, 30 April 1921,
pp. 947–8.
24. From K. Ueda to Patrick H. Tansey, 1 June 1947, RG 331, BOX 9941, National Archives and
Record Administration.
JMH References
Adams, S. (2010), “Intellectual property rights, investment climate and FDI in developing countries”,
International Business Research, Vol. 3 No. 3, pp. 201-209.
Andersson, D.E. and Tell, F. (2016), “Patent agencies and the emerging market for patenting services in
Sweden, 1885–1914”, Entreprises et Histoire, Vol. 82 No. 1, pp. 11-31.
Bertilorenzi, M. (2015), The International Aluminium Cartel: The Business and Politics of a Cooperative
Industrial Institution (1886–1978), Routledge, 2015.
Boldrin, M. and Levine, D.K. (2008), Against Intellectual Monopoly, Cambridge University Press, Cambridge.
Bresman, H., Birkinshaw, J. and Nobel, R. (1999), “Knowledge transfer in international acquisitions”,
Journal of International Business Studies, Vol. 30 No. 3, pp. 439-462.
Budde-Sung, A. (2021), “Battle for the boot: trademarks and competitiveness in the global UGG boot
industry, 1979-2019”, Journal of Management History, Vol. 27 No. 2, pp. 169-185.
Cantwell, J.A. (1995), “The globalization of technology: what remains of the product cycle model”,
Cambridge Journal of Economics, Vol. 19 No. 1, pp. 154-174.
Cerretano, V. (2013), ‘“European cartels and technology transfer: the experience of the rayon industry,
1920–1940”, in Pierre-Yves, Donzé and Shigehiro, Nishimura (Eds), Organizing Global
Technology Flows: Institutions, Actors, and Processes, Routledge, London and New York, NY,
pp. 101-125.
Chandler, A. (1990), Scale and Scope: The Dynamics of Industrial Capitalism, Harvard University Press,
Cambridge.
Chang, H.-J. (2001), “Intellectual property rights and economic development: historical lessons and
emerging issues”, Journal of Human Development, Vol. 2 No. 2, pp. 287-309.
Degner, H. and Streb, J. (2014), ‘“Foreign patenting in Germany 1877–1932”, in: Pierre-Yves, Donzé and
Shigehiro, Nishimura (Eds), Organizing Global Technology Flows: Institutions, Actors, and
Processes, Routledge, London and New York, NY.
Donzé, P.-Y. (2013a), ‘“The international patent system and the global flow of technologies: the case of
Japan, 1880–1930”, in Dejung, Christof and Petersson, Niels P. (Eds), The Foundation of
Worldwide Economic Integration: Power, Institutions, and Global Markets, 1850–1930,
Cambridge University Press, Cambridge, pp. 179-201.
Dunning, J.H. (1981), International Production and the Multinational Enterprise, Allen and Unwin, London.
Feldenkirchen, W. (1995), Siemens, 1918–1945, Columbus.
Feldenkirchen, W. (2000), Siemens: From Workshop to Global Player, Munich.
Fischer, L. (1922), Werner Siemens Und Der Schutz Der Erfindungen, Berlin.
Fischer, L. (1923), Die Arbeit Des Patentingenieurs in Ihrem Psychologischen Zusammenhängen, Verlag
von Julius Springer, Berlin.
Fontana, R., Nuvolari, A., Shimizu, H. and Vezzulli, A. (2013), “Reassessing patent propensity: evidence
from a dataset of R&D awards, 1977–2004”, Research Policy, Vol. 42 No. 10, pp. 1780-1792.
Fuji Electric Co. Ltd (1957), A History of Fuji Electric, Fuji Electric Co. Ltd.
Fuji Tsushinki Manufacturing Company Ltd (1964), Company History, Fuji Tsushinki Manufacturing
Company Ltd.
Grandtrand, O. (1999), The Economics and Management of Intellectual Property: Toward Intellectual
Capitalism, Edward Elgar, Cheltenham, UK and Northampton, MA.
Hausman, W.J., Hertner, P. and Wilkins, M. (2008), Global Electrification: Multinational Enterprise and
International Finance in the History of Light and Power, 1878–2007, Cambridge University
Press, Cambridge.
Hughes, T.P. (1983), Networks of Power: electrification in Western Society, 1880–1930, Johns Hopkins
University Press, Baltimore.
Hymer, S. (1976), The International Operations of National Firms: A Study of Direct Foreign The case of
Investment, MIT Press, Boston, MA.
Siemens
Jones, G. (2005), Multinationals and Global Capitalism: From the Nineteenth to the Twenty First Century,
Oxford University Press, Oxford. (1890–1945)
Khan, B.Z. (2013), “Selling ideas: an international perspective on patenting and markets for
technological innovations, 1790–1930”, Business History Review, Vol. 87 No. 1, pp. 39-68.
Kirchberg, D. (2010), “Analyse der internationalen unternehmenstätigkeit des hauses siemens in
ostasien vor dem zweiten weltkrieg”, Unpublished PhD dissertation, Friedrich-Alexander-
Universität Erlangen-Nürnberg.
Kudo, A. (1992), Nichi-Doku Kigyou Kankei Shi [History of the Business Relationship between Japan and
Germany], Yuhikaku, Tokyo.
Lamoreaux, N.R. and Sokoloff, K.L. (2003), ‘“Intermediaries in the U.S. market for technology, 1870–
1920”, in Engerman, S.L. and Davis, L.E. (Eds), Finance, Intermediaries, and Economic
Development, Cambridge University Press.
Mansfield, E. (1995), Intellectual Property Protection, Direct Investment, and Technology Transfer:
Germany, Japan, and the United States. IFC Discussion Papers, World Bank Publications,
Washington, DC.
Mason, M. (1992), American Multinationals and Japan: The Political Economy of Japanese Capital
Controls, 1899–1980, Cambridge, Mass.
Momotani, R. (1955), Nihon ni Okeru Siemens No Jigyo to Sono Keireki [Business and the History of
Siemens in Japan], Tokyo.
Nagaoka, S. (2009), “Does strong patent protection facilitate international technology transfer? Some
evidence from licensing contracts of Japanese firms”, The Journal of Technology Transfer,
Vol. 34 No. 2, pp. 128-144.
Nicholas, T. and Shimizu, H. (2013), “Intermediary functions and the market for innovation in Meiji and
Taishō Japan”, Business History Review, Vol. 87 No. 1, pp. 121-149.
Nicholson, M.W. (2007), “The impact of industry characteristics and IPR policy on foreign direct
investment”, Review of World Economics, Vol. 143 No. 1, pp. 27-54.
Nishimura, S. (2004), “General electric’s international patent management before world war II: the
‘proxy application’ contract and the organizational capability of Tokyo electric”, Japanese
Research in Business History, Vol. 21, pp. 101-125.
Nishimura, S. (2009), “Foreign business and patent management before WWI: a case study of the general
electric company”, Kansai University Review of Business and Commerce, No. 11, pp. 77-97.
Nishimura, S. (2016), Kokusai Tokkyo Kanri no Nihonteki Tenkai: GE to Toshiba no Teikei ni yoru
Seisei to Hatten [International patent management in Japan: the formation and development of
local patent management via cooperation between GE and Toshiba], Yuhikaku, Tokyo, pp. 44-46.
Penrose, E.T. (1951), The Economics of the International Patent System, The Johns Hopkins Press, Baltimore.
Plumpe, W. (2016), German Economic and Business History in the 19th and 20th Centuries, Palgrave
Macmillan, UK.
Reitzig, M. and Puranam, P. (2009), “Value appropriation as an organizational capability: the case of IP
protection through patents”, Strategic Management Journal, Vol. 30 No. 7, pp. 765-789.
Reitzig, M. and Wagner, S. (2010), “The hidden costs of outsourcing: evidence from patent data”,
Strategic Management Journal, Vol. 31 No. 11, pp. 1183-1201.
Saiz, P. and Castro, R. (2017), “Foreign direct investment and intellectual property rights: international
intangible assets in Spain over the long term”, Enterprise and Society, Vol. 18 No. 4, pp. 846-892.
Seyoum, B. (2006), “Patent protection and foreign direct investment”, Thunderbird International
Business Review, Vol. 48 No. 3, pp. 389-404.
Siemens, K.K. (1987), 100 Jahre Siemens in Japan, Tokyo.
JMH Swope, G. Jr (1972), Historical Review of GE’s Foreign Business as Affected by US antitrust Laws,
October, The Museum of Innovation and Science Archives.
Takenaka, T. (1991), Jiimensu to Meiji Nihon [Siemens and Meiji Japan], Tokyo.
Takenaka, T. (2009), ‘“Business activities of siemens in Japan: a case study of German-Japanese
economic relationships before the first world ‘war”, in Akira Kudo, Nobuo Tajima and Erich
Pauer (eds), Japan and Germany: two Latecomers to the World Stage, 1890–1945, Kent, Vol. 1,
pp. 114-149.
Teece, D.J. (2000), “Strategies for managing knowledge assets: the role of firm structure and industrial
context”, Long Range Planning, Vol. 33 No. 1, pp. 35-54.
Tokkyo kyoku [Patent Office] (1911), Meiji 44 Nen 3 Gatsu 31 Nichi Genzai Tokkyo Benrishi Meibo
[Patent Attorney List as of 31 March 1911], Tokyo.
Udagawa, M. (1987), “Senzen Nihon no kigyō keiei to gaishikei kigyō’ [foreign firms and management
in pre-war Japan]”, Keiei Shirin, 1987, Vol. 24 Nos 1/2, p. 25.
Vlajcic, D., Caputo, A., Marzi, G. and Dabic, M. (2019), “Expatriates managers’ cultural intelligence as
promoter of knowledge transfer in multinational companies”, Journal of Business Research,
Vol. 94, pp. 367-377.
Von Weiher, S. and Goetzeler, H. (1977), The Siemens Company: first Historical Role in the Progress of
Electrical Engineering, 1847–1980, Berlin.
Wilkins, M. (1970), The Emergence of Multinational Enterprise: American Business Abroad from the
Colonial Era to 1914, Harvard University Press, Cambridge, MA.
Wilkins, M. (1974), The Maturing of Multinational Enterprise: American Business Abroad from 1914 to
1970, Harvard University Press, Cambridge, MA.

Further reading
Donzé, P.-Y. (2013b), “Siemens and the business of medicine in Japan, 1900–1945”, Business History
Review, Vol. 87 No. 2, pp. 203-228.
Japan Patent Office (1984), Kogyo Shoyuken Seido Hyakunen Shi [One Hundred Years of the Industrial
Property Rights System], Tokyo, Vol. 1.

About the authors

Pierre-Yves Donzé is professor of business history at Osaka University (Japan) and visiting professor
at the University of Fribourg (Switzerland). His most recent publications include articles on the
luxury and fashion business (Business History, 2020; with Rika Fujioka: Enterprise & Society, 2020;
with Ben Wubs: International Journal of Fashion Studies, 2019), a special issue of Business History on
health industries (coedited with Paloma Fernandez Pérez: 2019), and the book Making Medicine a
Business: X-ray Technology, Global Competition, and the Transformation of the Japanese Medical
System, 1895-1945 (2018). Pierre-Yves Donzé is the corresponding author and can be contacted at:
donze@econ.osaka-u.ac.jp
Shigehiro Nishimura is professor of business history at Kansai University (Japan). His most recent
publications include a chapter on the intellectual property rights in the book Property Rights in
Economic History: Early Meiji Japan to Modern Period (edited by Kobayasi: 2020) , an article on the
rise of patent department in Westinghouse Electric (Entreprises et Histoire, 2016), the book
International Patent Management in Japan: The Formation and Development of Local Patent
Management via Cooperation between GE and Toshiba (2016), and the book Organizing Global
Technology Flows: Institutions, Actors, and Processes (coedited with Pierre-Yves Donzé: 2014).

For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com