Dairy Farmers of Canada opposition to "Monster Milk" trade-mark rejected by Registrar

In July of this year, the Registrar of Trade-Marks in Canada dismissed oppositions filed by the Dairy Farmers of Canada against the proposed registration of trade-marks for "Monster Milk" and "Monster Mlk".  The registrations were requested by Cytosport, Inc. for a product described as: "Dietary and nutritional supplements for use in athletic training, namely for improving body strength and building muscle, excluding ready to drink beverages."

Dairy Farmers of Canada argued that the proposed trade-marks "whether depicted, written or sounded, are deceptively misdescriptive in the English language of the character or quality of the [products] in association with which they are proposed to be used.  Indeed, when depicted, written or sounded, the average consumer is likely to believe that the [products] are made of 'real milk' or contain 'real milk'."

The applicant, Cytosport, Inc., submitted that the term "milk" has a number of definitions that make it "clear that the work 'milk' could mean many different things and would not, in the mind of an average consumer, necessarily refer to cow's milk." 

The Registrar concluded that the trade-marks were registrable: "The work MILK (or MLK) is only one word in a composite mark.  The combination of the word MONSTER with the word MILK (or MLK) is unusual.  Aside from the word MILK (or MLK) that may suggest the character of the dietary and nutritional supplements, there remains the distinctive portion MONSTER.  The word MILK (or MLK) is no more dominant than the word MONSTER.  The combination of MONSTER and MILK (or MLK) does not create a trade-mark that can be viewed as a whole as descriptive of the character or quality of the dietary and nutritional supplements.  As the first portion of the test is not met, the [trade-marks] cannot be found misdescriptive."

Read the decision at: Dairy Farmers of Canada v Cytosport.

Michael Schmidt loses unpasteurized milk appeal

The Ontario Court of Appeal has dismissed the appeal by Michael Schmidt of convictions on thirteen counts under the Milk Act and the Health Protection and Promotion Act (HPPA) related to the production, sale and distribution of unpasteurized milk and cheese.  Schmidt had tried to comply with the HPPA by creating a cow-share program where members purchased shares in milk cows (so that there was no real sale of unpasteurized milk produced by the cows).  The cow-share agreements were oral in nature, and there was no evidence that the name of the cow in which a member had a share was ever communicated to the member.  There was also no evidence that the agreements formally transferred ownership in the cow from Schmidt to the member.

At trial, Schmidt was acquitted of the charges on the basis that the private cow-share scheme was not caught by the legislation.  On appeal by the Crown to the Ontario Court of Justice, most of the acquittals were reversed, giving rise to Schmidt's appeal to the Court of Appeal for Ontario.  The Court of Appeal dismissed Schmidt's appeal.  With respect to the legislation banning the sale and distribution of unpasteurized milk, the Court wrote: "provided that the legislature has acted within the limits imposed by the constitution, the legislature’s decision to ban the sale and distribution of unpasteurized milk to protect and promote public health in Ontario is one that must be respected by this court."

The Court rejected Schmidt's contention that the cow-share scheme did not fall within the definitions of sale and distribution.  In the Court's view, "the cow-share arrangement is nothing more than a marketing and distribution scheme that is offered to the public at large by the appellant."  The Court also rejected arguments that the ban on the sale and distribution of unpasteurized milk in this case violated the Charter rights of the cow-share members.  The Court ruled that the ban did not constitute an infringement of the members' security of the person and did not infringe on the right of liberty.  As the Court stated, "lifestyle choices as to food or substances to be consumed do not attract Charter protection". 

Read the decision at: R. v. Schmidt.

Tingle voltage appeal dismissed by Ontario Court of Appeal

The Court of Appeal for Ontario has upheld the dismissal of a damage claim by dairy farmers who alleged tingle voltage or stray voltage as the cause of reduced milk production.  The trial judge accepted the expert evidence of the claimants that tingle voltage could cause the type of harm alleged, but found that it was not the cause in this case.  The Court of Appeal noted:

"The trial judge considered the whole of the evidence and importantly found that if tingle voltage had been the cause of the reduced milk production from 1997 forward, there would have been overt signs on the herd. He concluded that the evidence did not demonstrate such signs and accordingly the appellants had not established that the herd was being affected by tingle voltage. In his view, milk production had been relatively good in 1995 and 1996 and declined thereafter and there was no change in the hydro system that could account for the changes after 1997."

While the trial judge had found that Hydro One had breached the standard of care in failing to give adequate warning to farmers about the possible harms caused by tingle voltage, the lack of causation between the tingle voltage and the loss of milk production was fatal to the claim.  The trial judge found that the only cause of milk production loss proven on a balance of probabilities was inadequate labour, and the Court of Appeal declined to interfere with this finding.

Read the decision at: Cowan v. Hydro One Networks Inc.

Tribunal upholds rejection of milk from farm's bulk tank

The Ontario Agriculture, Food and Rural Affairs Tribunal has dismissed an appeal by an Ontario dairy farm from the rejection of milk from its operation by the Dairy Farmers of Ontario ("DFO").  The farm has operated for 30 years and, in the fall of 2010, was carrying out three milkings a day.  A transport company picked up the milk from a farm bulk tank on every second day, representing six milkings.

On November 28, 2010, the transporter (a certified Bulk Tank Milk Grader) arrived to pick up milk.  He rejected the milk "because of an off odour "malty" smell".  He took two samples and declined to pick up the milk, leaving a "Red Tag" at the farm.

The farm appealed the rejection of the milk on the basis that the DFO had not followed the proper procedure.  However, the Tribunal ruled that procedural errors made by DFO and its agent, the transporter (not properly filling out the Red Tag and not proving that DFO had adopted a policy of "no second opinions" with respect to the rejection of milk), did not negate the determination that the milk should be rejected. 

Read the decision at: La Gantoise Inc. vs. Dairy Farmers of Ontario (DFO).

Ontario Court dismisses claim by dairy farmers re stray voltage

Ron and Helen Cowan purchased a farm near the Village of Earlton in the fall of 1991.  They moved to the farm in the spring of 1992 and began a dairy farming operation there later that same summer.  Although the farm seemed to enjoy a measure of success in its early years, it was later plagued by poor milk production, both in terms of quantity and quality.  By 2002 circumstances were such that they had no choice but to shut down their dairy farm, and to sell their herd and dairy quota. 

In an action against Hydro One, the Cowans alleged that the decline in their herd’s milk production was due to the presence of tingle voltage (or stray voltage) caused by the Hydro One system.  A trial was held to determine if this was so and to assess the damages alleged to have been suffered.  The Cowans claimed negligence and breach of contract against Hydro One and, in addition, made a claim for punitive damages.  Justice Robbie Gordon dismissed the farmers' claims, finding that causation was not proved (i.e. the Cowans failed to show that their damages, which would have been assessed to be $823,053.77, were caused by Hydro One).

Tingle voltage and stray voltage are terms used to refer to the same phenomenon, namely, the difference in voltage potential between two points that a farm animal might make contact with at the same time.  The word “potential” is used because it is only when an animal touches the two objects, each with a different voltage potential, that its body completes an electrical circuit allowing current to flow from one object, through the animal, to the other object.  If the difference in voltage between the two contact points is high enough, the animal may feel a tingling sensation, and hence the term tingle voltage.  In fact, what the animal is exposed to is the current in the circuit, not the voltage on the points of contact.

On the question of negligence, Justice Gordon ruled that Hydro One owed a duty of care to the Cowans to ensure that electricity was safely delivered to them.  Also, their relationship was of sufficient proximity to warrant the existence of the duty of care - it would be reasonably foreseeable that a failure to provide electricity safely could result in harm to Hydro One's customers.  In order to prove negligence, the Cowans had to prove conduct on the part of Hydro One that created an unreasonable risk of harm to them.

Justice Gordon found that tingle voltage levels in the Cowan barn were prone to frequent fluctuation due to the loads in use.  Tingle voltage levels would also vary dramatically depending upon where in the barn one is situated.  He was satisfied that on a given day, steady state tingle voltage levels at certain cow contact points will regularly exceed one volt; that on a given day, but with less frequency, steady state tingle voltage levels at certain cow contact points will exceed two volts but not exceed three volts; and, that on a given day, but with much less frequency, certain cow contact points will be exposed to transient tingle voltage levels in excess of three volts.

Justice Gordon also determined that, but for the Hydro One system, the tingle voltage on the Cowan farm was reduced to negligible levels.  The question then was whether there any conduct on the part of Hydro One that created an unreasonable risk of harm (i.e. negligent conduct).  The Cowans alleged: (1) Failure to ensure that the primary neutral was directly bonded to the secondary neutral by a jumper wire; (2) improperly placement of a sentinel light on the transformer pole; (3) failure to maintain adequate grounding along the F2 line; (4) failure to follow its standards and procedures for testing tingle voltage and resolving the tingle voltage issue at the Cowan farm; (5) failing to monitor and control current and voltage imbalance on the distribution system; and (6) failing to maintain a primary neutral wire of sufficient capacity. 

Although Justice Gordon found that, in some instances, Hydro One could have done things differently, he noted that the standard of care expected of Hydro One is not perfection.  That it could have taken steps that it did not was not the end of the inquiry.  It was also necessary to determine whether those actions breached the required standard of care, that is, whether those actions created an objectively unreasonable risk of harm having regard to the likelihood of a known or foreseeable harm, the gravity of that harm, the burden of cost which would be incurred to prevent the injury, industry practice, compliance standards, and statutory or regulatory standards.

Following his analysis, Justice Gordon found that Hydro One's practice of notification of farmers about the risks of tingle voltage was inadequate.  It was not enough to stuff bills with an information pamphlet on a few occasions.  The standard of care required that Hydro One have direct contact with customers it knew to be potentially vulnerable to advise them of increased risk.  Therefore, the Cowans were successful in establishing that Hydro One owed them a duty of care and breached the standard of care.  However, it still remained to show that they had suffered damages that flowed from the breach of the standard.

Justice Gordon accepted that voltage of the level and nature of those found to exist on the Cowan farm could, over the long term, lead to health and production issues for dairy cows.  He was not satisfied that such voltage levels adversely affect production without a contemporaneous effect on health, but he was satisfied that such voltage levels can lead to various health problems which can ultimately affect production.  The question was still whether the damages suffered by the Cowans were caused by the negligence of Hydro One. 

In the end, the Cowans were unable to prove this element of causation.  Justice Gordon found that Hydro One proved on a balance of probabilities that inadequate farm labour likely contributed to production problems in the dairy herd.  Other contributing factors could not be identified because of the inadequacy of the records kept by the Cowans.  On the whole, Justice Gordon was not satisfied on a balance of probabilities that tingle voltage was a contributing factor to the production issues experienced on the Cowan farm.  That it would have had a negative effect on production was belied by: (1) The positive production levels for the farm in 1995 and 1996; (2) the acceptable somatic cell counts recorded for most of the time the farm operated; and (3) the lack of health issues on the farm that ought to have been apparent had tingle voltage been causing significant stress to the cows.

Because causation was not proven, the Cowans' claim for breach of contract failed as well.  Justice Gordon also addressed the defence put forward by Hydro One based on its "Conditions of Service", which are implied terms of its contract with its customers.  The Conditions of Service currently limit Hydro One's liability for damages to those arising out of its negligence and exclude any liability for "any loss of profits or revenues, business interruption losses, loss of contract or loss of goodwill, or for any indirect, consequential, incidental or special damages, including but not limited to punitive or exemplary damages, whether any of the said liability, loss or damages arise in contract, tort or otherwise."  These terms are set down by the Ontario Energy Board through the Distribution System Code.  Justice Gordon ruled that the terms did not affect the Cowans' claim, as they came into effect in 2002 - long after the alleged negligent conduct of Hydro One.

Read the decision at: Cowan v. Hydro One.

Reasons for Decision in Michael Schmidt raw milk case released

The Reasons for Decision of Justice P.D. Tetley in the Michael Schmidt raw milk case are now available at: R. v. Schmidt.  Schmidt had been acquitted of all charges against him by a Justice of the Peace, but that decision has now been overturned and he has been convicted on 15 of 19 charges against him under the Provincial Offences Act (see my recent post).  The POA charges arose from alleged violations of the Health Protection and Promotion Act, R.S.O. 1990, c. H-7 (17 counts) and the Milk Act, R.S.O. 1990, c. M-12 (2 counts).  Counsel for the parties have been asked to confer with the trial coordinator to set a date for sentencing of Mr. Schmidt.

BC Court rejects challenge of marketing board ruling that farmers cannot rent out milk quota

Lilian and Sandy Stewart (the “Stewarts”), are dairy farmers and owners of milk quota. They had a contract milking agreement with a third party, Steven Verdonk, to “milk” their lower mainland quota rather than milk it themselves, in contravention of the rules of the quota system in British Columbia.  The British Columbia Farm Industry Review Board (the “BCFIRB”) and the B.C. Milk Marketing Board (the “Milk Board”), became aware that many quota holders, like the Stewarts, were renting out their quotas contrary to the rules of the quota system, and therefore began a process of regularizing the system, including dealing with the non-compliant quota holders and those who rented from them.  On November 7, 2008, the Milk Board made a decision to retract the Stewarts’ milk quota due to their non-compliance with the rules and to allocate the quota to Mr. Verdonk. The Stewarts appealed the Milk Board’s decision to the BCFIRB.  In a decision released on February 26, 2009, the BCFIRB dismissed the Stewarts’ appeal.  The Stewarts then made an application for judicial review of the Board's decision.

In its hearing of the judicial review application, the B.C. Supreme Court found that:

• the treatment of the Stewarts' issues by the Board was not unfair;
• the procedural aspects of the hearing by the Board did not demonstrate unfairness; and,
• the decision itself of the Board was not patently unreasonable (or unreasonable at all).

On this basis, the judicial review application was dismissed. 

Read the decision at: Stewart v. British Columbia Farm Industry Review Board.

Ontario Government to appeal Michael Schmidt raw milk acquittal

CBC News - Toronto - Ont. appealing raw milk producer's acquittal

Ontario's Ministry of the Attorney General has confirmed that it will appeal the recent acquittal of raw milk crusader Michael Schmidt. Schmidt was acquitted by a justice of the peace. The appeal will go to a judge of the Ontario Court of Justice.

CBC News - Ontario farmer not guilty of selling raw milk

CBC News - Canada - Ontario farmer not guilty of selling raw milk

Dairy farmer Michael Schmidt has been found not guilty of 19 charges related to the sale of unpasteurized milk. Schmidt represented himself against the Ministry of Natural Resources in a trial before the Ontario Provincial Offences Court.

I'll keep an eye out for any written reasons for the verdict in the case and post a link to them if they are available.