35 U.S.C. 103 Conditions for patentability; non-obvious subject matter.
(a) A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.

The book "A Mind of Its Own," by British psychologist Cordelia Fine, categorizes and chronicles the myriad ways we are self-delusional. The motivation for such self-delusion is emotional comfort. One chapter, on the pig-headed brain, describes how hindsight morphs the unrelated into the inevitable.

The faith we hold in the infallibility of our beliefs is so powerful that we are even capable of creating evidence to prove ourselves right - the self-fulfilling prophecy.... With the benefit of hindsight, what has happened seems inevitable and foreseeable, and you convince yourself you saw it coming.... Our refusal to acknowledge that our opinions benefit from hindsight is particularly troublesome for legal cases....

Prof. Gregory Mandel at Albany Law School, writes in "Patently Non-Obvious: Empirical Demonstration that the Hindsight Bias Renders Patent Decisions Irrational" (from SSRN) -

(1) the hindsight bias distorts patent decisions far more than anticipated, and to a greater extent than other legal judgments; (2) neither the Federal Circuit’s suggestion test nor the Supreme Court’s Graham requirements solve the hindsight problem; (3) the admission of secondary consideration evidence does not cure the hindsight bias; (4) jury instructions that explicitly identify and warn against the hindsight bias do not ameliorate its impact; and, (5) the hindsight problem pervades patent law to an extent not previously recognized—it biases decisions under the doctrine of equivalents, claim construction, the on-sale bar, and enablement.

The study results indicate that the non-obvious requirement actually often may be applied too stringently. Numerous critics of the current non-obvious requirement may need to reconsider the bases of their challenges and revisit their prescriptions for reform. Revising non-obvious doctrine or practice, for instance, will not provide the panacea that most assume.

Proper non-obvious determinations are unachievable because they require the use of hindsight. The decision should turn on whether the invention was non-obvious in the ex ante world just prior to the invention’s creation. A proper non-obvious decision must not take into account the ex post fact that the invention actually was achieved. The present study, however, reveals that people are cognitively incapable of making such an evaluation properly. Rather, decision-makers unconsciously let knowledge of the invention bias their conclusion concerning whether the invention was obvious in the first instance. These findings are supported by other studies in behavioral economics and cognitive psychology outside the patent context.1 Individuals are intellectually incapable of preventing hindsight information from impacting their judgments about the past. Individuals routinely (and unconsciously) overestimate what would have been anticipated in foresight and tend to view what actually occurred as having been relatively inevitable and foreseeable.

The failure of the legal system to correct for the hindsight bias in patent law likely stems in part from a failure to recognize its magnitude, pervasiveness, and unshakable nature. The results presented here indicate that there is a greater hindsight effect for non-obvious determinations than for any other legal judgment. In one scenario, based upon actual patent litigation, approximately one-quarter of mock-jurors considered an invention obvious in the foresight condition (the doctrinally accurate analysis), while about three-quarters of mock-jurors considered the same invention obvious in hindsight (the condition in which patent decisions and litigation actually occur). This effect (about half of the respondents shifted their legal conclusion in hindsight) was greater than that found in other legal hindsight bias studies in areas such as negligence, punitive damages, and civil rights litigation. A second scenario, based on a different patent case, similarly found a greater hindsight bias in patent law than in other reported legal judgments.

[I]ndividuals are not cognitively able to prevent knowledge gained through hindsight from impacting their analysis of past events. Rather, individuals routinely overestimate the ex ante predictability of events after they have occurred. Critical for patent law, once individuals have hindsight information they consistently exaggerate what could have been anticipated in foresight and not only tend to view what has occurred as having been inevitable, but also as having appeared “relatively inevitable” beforehand.

Potentially further biasing the non-obvious analysis is that it actually requires two hindsight determinations: whether the invention was obvious at the time it was made and the past level of ordinary skill in the art. Because the skill level of a person having ordinary skill in the art (a “PHOSITA”) increases over time, individuals are expected to consider historic PHOSITAs to be more skilled than they actually were due to the hindsight bias. Such attribution will tend to make inventions appear more obvious than they were. Because of this dual effect, non-obvious determinations may exhibit a greater hindsight bias than other hindsight judgments.

The hindsight bias appears to be caused by a combination of factors. The most significant factor is cognitive: once an individual learns of an outcome, this (apparently irreversibly) changes the individual’s understanding of the world in ways that make the outcome appear inevitable. The individual automatically projects this new knowledge onto the past and is cognitively challenged in recognizing that it is influencing his or her judgment. Individuals automatically integrate an outcome and the events that preceded it into a coherent story, which tends to make the antecedents appear more influential and consequential than they are in foresight. Correspondingly, antecedents that would have indicated alternative outcomes are disregarded as having been inconsequential. Motivational factors likely also play a role in the hindsight bias: individuals want to see the world as stable and predictable, and they want to be viewed by others as intelligent and perceptive. Stating or believing that an outcome was predictable satisfies both of these desires.

The hindsight bias has proven remarkably unyielding to varied efforts to ameliorate its impact. Asking individuals to ignore outcome knowledge, formulate the opinion of one unaware of the outcome, or warning them about the dangers of the hindsight bias does not significantly reduce its impact. Similarly, various motivational techniques, such as suggesting that individuals try harder or rewarding them for unbiased responses, do not lessen the bias... Once individuals are aware of an outcome they are cognitively unable to discount or ignore that knowledge; they no longer can view prior events objectively.

Mandel details numerous studies that back his insights. If you have any respect for evidence and rigorous logic regarding the issue of obviousness in light of hindsight, and not just with regard to prior art, but also claim construction, enablement, the doctrine of equivalents, and the on-sale bar, Mandel's paper is essential reading.

Exemplary of the woolly-headed signifying common in the pro-KSR amici briefs, the Electronic Frontier Foundation (EFF) stands up for the rampant patent infringement in the open-source software arena by making the bold tautology that what is obvious is obvious, and disparages fact finding as "inefficient and burdensome."

In the name of preventing hindsight bias, the court below has denied judges the ability to use common sense and rationality to determine the weight of the obviousness evidence before them. What is worse, it has forced litigants to search through haystack upon haystack of technical knowledge for the exact needle in which someone, somewhere, bothers to state the obvious. Such endeavors are not only inefficient and burdensome but, as many commentators and practitioners in the field have written, are contrary to the principles, polices, and standards this Court has announced.

Here is earlier commentary on this topic in the Patent Prospector (consistency being the hobgoblin of a small mind): June 26, 2006; May 30, 2006; October 9, 2005.