Comment 21 for bug 176326

I had a similar problem when using an old KVM switch between mouse and computer.
my solution was:

sudo sh -c 'echo options psmouse proto=imps > /etc/modprobe.d/kvm-fix'
sudo modprobe -r psmouse
sudo modprobe psmouse

if it doesn't work for you, just do:

sudo rm /etc/modprobe.d/kvm-fix
sudo modprobe -r psmouse
sudo modprobe psmouse

and everything will be as it was.
note that the name "kvm-fix" is just an arbitrary name, could be any non-used name actually.
hope this helps.