Pattern welding is the process of forge-welding layers of different steels into a single billet, then manipulating and grinding it so the layer boundaries show as a pattern. It is the technique that produces modern Damascus.
Alternating steels are stacked, heated to welding temperature and hammered into one piece. The billet is then drawn out, cut, folded and re-welded, doubling the layer count each time. Twisting, drilling or pressing the billet before the final grind produces named patterns like ladder, raindrop and twist.
Because the layers run through the whole billet, grinding a bevel exposes them at the edge. That is the practical test for real pattern welding.
Historically, pattern welding solved a problem: it combined the hardness of one steel with the toughness of another when nobody could make consistent homogeneous steel. Modern steel making solved that problem far better.
Today it is chosen for appearance. A pattern-welded blade can perform very well if the constituent steels and the heat treat are good, but the pattern itself contributes nothing to how it cuts. See Damascus pattern.