The story goes something like this . . .

Douglas Engelbart and some of his associates at the Stamford Research
Institute invented the mouse in the 1960s. It was large and crude and
was made out of wood . . . but it was a mouse, and it got its name
about that time. The device was demoed at the 1968 Fall Joint
Computer Conference in Menlo Park and San Francisco. This unit was
complicated to use. Douglas Engelbart’s device used two wheels to
move a potentiometer.

Researchers at the Xerox Palo Alto Research Center [Xerox PARC]
refined the mouse in the 1970s. Their version cost $400 and a
required interface device cost $300. However, this device was much
easier to use. The Xerox unit used a ball bearing, two rollers and
some electrical brushes. [BTW Xerox people also had worked on an
optical mouse at that time, which only now has hit the mass market.]

Steve Jobs saw the mouse at Xerox PARC in 1979, during the
demonstration of various computer technologies. He gave the job of
developing the Apple mouse to an independent design house started by
two graduate students from Stanford University. Their company was
called Hovey-Kelley Design of Palo Alto. All they had to do was make
it more than 10 times cheaper that the Xerox unit! No small task.
Their first feasibility demonstration unit used a Ban Roll-on ball
and a butter dish! The rest is history . . .