Abstract: Technological Divide or Managerial Divide? A Comparative Study on the Patent Management of GE and Westinghouse

Shigehiro Nishimura

Abstract

This paper examines the development of the research and development (R&D) organizations and patent management structures at GE and Westinghouse during the 1920s and 1930s. The numbers of the two companies’ patent applications show quite contrasting trends: although GE expanded their patenting activity almost consistently over the two-decade period, Westinghouse demonstrated a general decline in patent volume until the mid-1930s. The reasons behind the differences between the two companies lie partly in the features of their R&D and patent management strategies. In terms of R&D, GE secured a substantial volume of technologies from affiliated foreign companies on a continuing basis and applied for US patents accordingly. On the other hand, Westinghouse imported technologies to a lesser degree. While patents invented by works laboratories pushed GE’s patent applications upward, the general lack of invention activity at Westinghouse’s main laboratories drove the company’s total patent applications down. On the patent management side, meanwhile, the two companies adopted different approaches. GE had a centralized structure for patent management; the department could influence the direction of the company’s research. On the contrary, Westinghouse had a decentralized structure—and within that kind of framework, it is doubtful that Westinghouse’s patent department could have directed the company’s research efforts.

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