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The state of the art is the highest level of development, as of a device, technique, or scientific field, achieved at a particular time. In this context, in the European patent law, the term "state of the art" is an extremely important concept for assessing novelty and inventive step, and is almost a synonym of "prior art" .
The phrase "state of the art" should be hyphenated when it is used as an adjective, e.g.: "This machine is an example of state-of-the-art technology", but not when used as a noun, as in the paragraph above.