How it works:
From left to right, the first IC is a binary counter, 74ls163, that is used to generate the address numbers we are going to use in the second part of the circuit, the demultiplexer 74ls138. This demux is the core of the circuit, as this IC pulls low the pin selected in the address inputs. Note that you need an external clock for the counter to work (count).
This is a very simple circuit to build, just take note of the control pins on each IC, since both have enable inputs for counting or output, but once set you don't need to worry about them. It can also be extended to 16 leds by using the Q3 output of the counter to control the enable inputs of a second demultiplexer, or just add a second one to generate a double pattern.
You can find the datasheets for both IC's by following the links:
74ls138 | | 74ls163
