The High Court has held that registration of a computer "mouse-on-wheels" trade mark would take unfair advantage of, and be detrimental to, Direct Line Insurance plc's established "telephone-on wheels" trade mark. From a business perspective, this case highlights the risks of taking on a trade mark that may bear a basic or conceptual similarity to a mark owned or used by a competitor.

Esure Insurance Limited (esure) had applied to register a three-dimensional computer "mouse-on-wheels" trade mark with the UK-IPO. They had also started to use the mark.

Direct Line Insurance plc (Direct Line) had been using a "telephone-on-wheels" device to market their insurance and financial services since 1990. The device became a prominent feature and had been extensively used in Direct Line's advertising. To protect it, Direct Line secured registered trade mark protection for three dimensional (as well as two dimensional) images of the "telephone-on-wheels."

In 2006 esure's application to register the "mouse-on-wheels" was successfully opposed by Direct Line on two grounds. The Hearings Officer found that the esure's "mouse-on-wheels" mark was (i) similar to Direct Line's earlier "telephone-on-wheels" mark and its use would result in a likelihood of confusion; and (ii) that use of esure's mark would take unfair advantage of and be detrimental to Direct Line's reputation in their earlier mark. It was highly relevant to the Hearing's Officer's decision that Direct Line's "telephone-on-wheels" mark was extensively used and well known to the public.

Esure were not pleased with this result and appealed to the High Court. The result was a bit of a mixed bag for esure - but they were ultimately unsuccessful.

The High Court upheld esure's challenge against the Hearings Officer's finding that their application should not fall on grounds of likelihood of confusion. The Judge found there was no evidential basis upon which the Hearings Officer could have concluded that esure's mark was linked or related with Direct Line's business. The marks were visually different, and even though both marks were essentially "communications devices on wheels" this conceptual similarity was not sufficient, in the Judge's mind, to demonstrate likelihood of confusion. The Judge held that an average consumer would likely regard the companies as competitors – not as connected.

However the High Court did uphold the Hearings Officer's finding that registration and use of esure's "mouse-on-wheels" mark would take unfair advantage of and be detrimental to Direct Line's mark. The Judge found that the Hearings Officer, in applying the relevant law relating to unfair advantage, had been correct in his assessment.

A number of interesting points come out of this case. From a business outlook, one thing the case illustrates is the importance of carefully assessing the risks associated with adopting a trade mark that is conceptually similar to that of a competitor. Even if a mark is visually distinct, basic or conceptual similarity could provide grounds for objection.