Am I misreading? It says:

"However, this did not preclude examiners from employing common sense. More recently [...], we explained that that use of common sense does not require a “specific hint or suggestion in a particular reference,” only a reasoned explanation that avoids conclusory generalizations."

Edit: Also, what about bad ideas? Just because someone didn't demonstrate a specific method doesn't mean its non-obvious. Suppose I decided to pop an alert box on end-of-scroll for touch devices. It's a stupid idea. Do we want to grant a patent to someone just because no one demo'd such a bad idea?

That part is referring to motivation to combine references, or extend an existing reference.

The Federal Circuit precedent on the issue used to be that you needed an explicit suggestion or motivation (in prior art) to combine two references or do further work, in order for that combination to be prior art, which was fairly ridiculous, but it was the law. See, for example, In Re Lee, 277 F.3d 1338 ( http://bulk.resource.org/courts.gov/c/F3/277/277.F3d.1338.00...). Some choice quotes (i'm too lazy to pull out the cites the opinion itself is making):

  "The factual inquiry whether to combine references must be    
  thorough and searching." Id. It must be based on objective   
  evidence of record. This precedent has been reinforced in 
  myriad decisions, and cannot be dispensed with.

...

  "Our case law makes clear that the best defense against the 
  subtle but powerful attraction of a hindsight-based 
  obviousness analysis is rigorous application of the 
  requirement for a showing of the teaching or motivation to
  combine prior art references."

There is also a still open question of the skill level of a person with ordinary skill in a given art and "obvious to try".

As for bad ideas, nothing in the law prevents you patenting useless or non-valuable things. We do in fact, grant plenty of patents on useless or non-valuable things.

As for whether we should, I personally don't believe we should, but the argument goes that "plenty of things that people thought were useless or bad ideas at the time turned out to be quite commercially valuable".

The Federal Circuit's TSM (teaching, suggestion, or motivation) requirement for showing non-obviousness was overruled by the Supreme Court in its 2007 KSR v. Teleflex opinion, available at http://scholar.google.com/scholar_case?case=5415246430487863...

KSR stressed the need for common sense in obviousness analysis; it also mentioned that "obvious to try" can be considered.

An excellent summary of the case by a young and well-regarded patent law professor is at http://www.patentlyo.com/patent/2007/04/ksr_v_teleflex_.html.

Yes, i'm quite aware (which is why i said "used to be"), I was simply explaining the quote in the MPEP that was cited by the parent, which was part of a discussion of what the law of obviousness used to be.

> As for bad ideas, nothing in the law prevents you patenting useless or non-valuable things.

Actually, section 101 of the patent statute expressly states that an invention must be useful in order to be patented. "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." (Emphasis added.)

There have been court cases in which patents were invalidated because their claimed subject matter had no discernible utility. See, e.g., the Janssen case: A patent claimed the use of a particular chemical formulation to treat Alzheimer's, but apparently there was zero evidence that the treatment actually had any effect. The case is summarized at http://www.pharmapatentsblog.com/2010/12/07/solving-utility-....

Yes, useless was a bad choice of words here. I should have said "stupid".