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The main algorithm (PatterMatch) was developed by Connelly Barnes, a Princeton grad student, who as interned at Adobe multiple times.

Read his original PhD thesis on "PatchMatch: A Randomized Correspondence Algorithm for Structural Image Editing" http://gfx.cs.princeton.edu/pubs/Barnes_2009_PAR/index.php

As well as the follow up paper with collaboration from Adobe: "Video Tapestries with Continuous Temporal Zoom" (published at SIGGRAPH) http://gfx.cs.princeton.edu/pubs/Barnes_2010_VTW/index.php

A paper detailing the technique was presented in SIGGRAPH a good year, year and a half, before Adobe added it to CS5.

There's prior art: specifically, GIMP did it first.

Technically someone wrote a plugin for GIMP. I don't think GIMP ever shipped with it. But otherwise yea, the plugin was first released in 2007 I think, years before Adobe first announced the feature.

Yep. The Resynthesizer plugin: http://www.logarithmic.net/pfh/resynthesizer