P.L. 112-29 , the Leahy-Smith America Invents Act, or "AIA," arguably made the most significant changes to the patent statute since the 19 th century. Among other provisions, the statute introduced into U.S. law a first-inventor-to-file priority rule, an infringement defense based upon prior commercial use, and assignee filing. The legislation prevented patents from claiming or encompassing human organisms, limited the availability of patents claiming tax strategies, and restricted the best mode requirement. The AIA also made notable reforms to administrative patent challenge proceedings at the U.S. Patent and Trademark Office (USPTO) and to the law of patent marking. Along with numerous other changes to patent laws and procedures, these reforms were intended to modernize the U.S. patent system and to improve its fairness and effectiveness. Congressional interest in patent reform was evidenced by sustained legislative activity that led to enactment of the AIA. There is broad agreement that more patents are sought and enforced than ever before; that the attention paid to patents in business transactions and corporate boardrooms has dramatically increased; and that the commercial and social significance of patent grants, licenses, judgments, and settlements is at an all-time high. As the United States becomes even more of a high-technology, knowledge-based economy, the importance of patents may grow even further in the future. Most experts agree that patent ownership is an incentive to innovation, the basis for the technological advancement that contributes to economic growth. It is through the commercialization and use of new products and processes that productivity gains are made and the scope and quality of goods and services are expanded. Award of a patent is intended to stimulate the investment necessary to develop an idea and bring it to the marketplace embodied in a product or process. Patent title provides the recipient with a limited-time monopoly over the use of his discovery in exchange for the public dissemination of information contained in the patent application. This is intended to permit the inventor to receive a return on the expenditure of resources leading to the discovery but does not guarantee that the patent will generate commercial benefits. The requirement for publication of the patent is expected to stimulate additional innovation and other creative means to meet similar and expanded demands in the marketplace. Passage of the AIA was preceded by several years of legislative debate about the current workings and future direction of the U.S. patent system. Although the discussion was wide-ranging, several points of concern were frequently mentioned. One was the recognition that differences between U.S. patent laws and global patent norms might increase the difficulty of domestic inventors in obtaining rights abroad. Another was that poor patent quality and high costs of litigating patent disputes might encourage speculation, or "trolling," by entrepreneurs that acquire and enforce patents. Congress also recognized that individuals, universities, and small entities play a role in the technological advancement and economic growth of the United States. A number of provisions of the AIA addressed these issues and concerns in different ways. As ultimately enacted, the AIA also reflects the reality that the courts have been active in making changes to important patent law principles. Some observers believe that several court decisions addressed the same concerns that had motivated earlier legislative reform proposals, thereby obviating or reducing the need for congressional action. For example, judicial opinions issued in the past several years have addressed the availability of injunctive relief against adjudicated patent infringers, the standards for deciding which venue is appropriate for conducting a patent trial, and the assessment of damages in patent infringement cases. As a result of these and other developments, several provisions found in predecessor versions of the AIA were not included in the final version of the statute. This study provides an overview of the AIA. It begins by offering a brief overview of the patent system. The specific components of this legislation are then identified and reviewed in greater detail. The report closes with further considerations. The patent system is grounded in Article I, Section 8, Clause 8 of the U.S. Constitution, which states that "The Congress Shall Have Power ... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries...." As mandated by the Patent Act of 1952, U.S. patent rights do not arise automatically. Inventors must prepare and submit applications to the U.S. Patent and Trademark Office (USPTO) if they wish to obtain patent protection. USPTO officials known as examiners then assess whether the application merits the award of a patent. The patent acquisition process is commonly known as "prosecution." In deciding whether to approve a patent application, a USPTO examiner will consider whether the submitted application fully discloses and distinctly claims the invention. In addition, the application must disclose the "best mode," or preferred way, that the applicant knows to practice the invention. The examiner will also determine whether the invention itself fulfills certain substantive standards set by the patent statute. To be patentable, an invention must consist of a process, machine, manufacture, or composition of matter that is useful, novel, and nonobvious. The requirement of usefulness, or utility, is satisfied if the invention is operable and provides a tangible benefit. To be judged novel, the invention must not be fully anticipated by a prior patent, publication, or other state-of-the-art knowledge that is collectively termed the "prior art." A nonobvious invention must not have been readily within the ordinary skills of a competent artisan at the time the invention was made. If the USPTO allows the patent to issue, the patent proprietor obtains the right to exclude others from making, using, selling, offering to sell, or importing into the United States the patented invention. Those who engage in these acts without the permission of the patentee during the term of the patent can be held liable for infringement. Adjudicated infringers may be enjoined from further infringing acts. The patent statute also provides for the award of damages "adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer." The maximum term of patent protection is ordinarily set at 20 years from the date the application is filed. At the end of that period, others may employ that invention without regard to the expired patent. Patent rights are not self-enforcing. Patentees who wish to compel others to observe their rights must commence enforcement proceedings, which most commonly consist of litigation in the federal courts. Although issued patents enjoy a presumption of validity, accused infringers may assert that a patent is invalid or unenforceable on a number of grounds. The U.S. Court of Appeals for the Federal Circuit (Federal Circuit) possesses national jurisdiction over most patent appeals from the district courts. The U.S. Supreme Court enjoys discretionary authority to review cases decided by the Federal Circuit. The AIA shifted the U.S. patent priority rule from the previous "first-to-invent" principle to the global norm of the "first-inventor-to-file" principle. Within the patent law, the priority rule addresses the circumstance where two or more persons independently develop the identical or similar invention at approximately the same time. In such cases the patent law must establish a rule as to which of these inventors obtains entitlement to a patent. Prior to the enactment of the AIA, the United States was the only patent-issuing state to follow the first-to-invent rule. Under this principle, when more than one patent application was filed claiming the same invention, the patent would be awarded to the applicant who was the first inventor in fact. This conclusion would hold even if the first inventor was not the first person to file a patent application directed towards that invention. Within this first-to-invent system, the timing of real-world events, such as the date a chemist conceived of a new compound or a machinist constructed a new engine, is of significance. In contrast, priority of invention under the first-inventor-to-file principle is established by the earliest effective filing date of a patent application disclosing the claiming invention. Stated differently, the inventor who first files an application at the patent office is presumptively entitled to the patent. Whether or not the first inventor applicant is actually the first individual to complete the invention in the field is irrelevant. This priority system follows the first-inventor-to file principle. A simple example illustrates the distinction between these priority rules. Suppose that Inventor A synthesizes a new chemical compound on August 1, 2012, and files a patent application on November 1, 2012, claiming that compound. Suppose further that Inventor B independently invents the same compound on September 1, 2012, and files a patent application on October 1, 2012. Inventor A would be awarded the patent under the first-to-invent rule, while Inventor B would obtain the patent under the first-inventor-to-file principle. The first-inventor-to-file rule established by the AIA became effective on March 16, 2013; applications filed prior to that date remain subject to the earlier, first-to-invent principle. Notably, the AIA does not allow one individual to copy another's invention and then, by virtue of being the first to file a patent application, be entitled to a patent. All patent applicants must have originated the invention themselves, rather than derived it from another. In order to police this requirement, the new legislation provides for "derivation proceedings" that allow the USPTO to determine which applicant is entitled to a patent on a particular invention. The AIA continues to provide inventors with a one-year period to decide whether to pursue patent protection after disclosing their inventions to the public.