Prior to the invention of the computer mouse Douglas Engelbart and his team at the Stanford Research Institute had to use preexisting devices in order to interact with the computer. Antecedents to the mouse included the light pen and the trackball.
The first trackball was invented by Tom Cranston and Fred Longstaff in 1952. The device was created for the Royal Canadian Navy and consisted of a Canadian bowling ball that was supported by air bearings.
The first light pen was invented by Ben Gurley in 1959.
The basic idea for the computer mouse came to Douglas Engelbart in 1961, while he was attending a computer graphics conference. He was unsatisfied with the other pointing devices available at this time. He came up with the design of a device that would use small wheels to move. He originally referred to the device as a “bug”. One of the wheels would turn horizontally and the other would turn vertically. Each wheel would transmit its coordinates for analysis to the computer.
Douglas Engelbart, working with his lead engineer, Bill English in 1963 built the first prototype of the computer mouse . The first mouse was encased in a carved out wooden box, it had perpendicular wheels underneath, and one button. The device was called a “mouse” because the cord and the motion made when using the device was reminiscent of a mouse scurrying across a table.
The first Mouse
During the years 1964 and 1965, Doug Engelbart and his team experimented with these different devices to determine the best approach. The tests were computerized and measured the speed and accuracy of these devices under several conditions. In conclusion, the mouse was determined to have the fastest transfer time. The transfer time is the amount of time that it takes the user to switch from his mode of screen selection (using the mouse, the trackball, the light pen), to typing on the keyboard.
Source: http://computermouse.umwblogs.org/invention/