from wikipedia :
The first patent for a compact epicyclic hub gear was granted in 1895. This was a 2-speed but was not commercially successful. In 1896 William Reilly of Salford, England patented a broadly similar 2-speed hub which went into production in 1898 as ‘The Hub’. It was a great success, remaining in production for a decade. It rapidly established the practicality of compact epicylic hub gears.
By 1902 Reilly had designed a 3-speed hub gear. He parted company with the manufacturer of ‘The Hub’ but had signed away to them the intellectual rights to his future gear designs. To circumvent this problem, the patents for Reilly’s 3-speed were obtained in the name of his colleague, James Archer. Meanwhile, well-known English journalist and inventor Henry Sturmey had also invented a 3-speed hub. In 1903 Frank Bowden, head of the Raleigh Cycle Company, formed The Three-Speed Gear Syndicate, having obtained the rights to both the Reilly/Archer and Sturmey 3-speeds. Reilly’s hub went into production as the first Sturmey Archer 3-speed.
In 1902 Mikael Pedersen (who also produced the Dursley Pedersen bicycle) patented a 3-speed hub gear and this was produced in 1903. This was said to be based on the “counter shaft” principle but was arguably an unusual epicylic gear, in which a second sun was used in place of an annulus.
By 1909 there were 14 different 3-speed hub gears on the British market.