Wheels come off eSure's Direct Line battle

Direct Line has claimed a landmark legal victory after its trademark red telephone on wheels won a Court of Appeal hearing against an upstart computer mouse on wheels that its rival eSure had hoped to use in its own advertising.

Best known for advertising featuring the film director Michael Winner, eSure ran into trouble with Direct Line after it launched a campaign in September 2004 using a mouse on wheels to sell online car and travel insurance.

Several months later, Direct Line filed a legal action against eSure, alleging that the promotional material would be confused with the red telephone on wheels it has used in advertising since launching in 1990. The two insurers have been trading blows in the courts ever since.

Direct Line produced research showing consumers were already being confused by the two companies' advertising, but the Court of Appeal said this evidence was not valid. The research was conducted after Direct Line itself had also begun running adverts featuring a mouse on wheels.

Nevertheless, Lord Justice Jacob said there was a danger that eSure's advertising would confuse customers familiar with Direct Line's original telephone, possibly resulting in customers thinking they were actually doing business with the latter insurer. He rejected eSure's application for a trademark, effectively preventing it using the mouse.

A spokesman for eSure said it had not ruled out an appeal.