Full opinion text
DECISION AND ORDER VICTOR MARRERO, District Judge. Plaintiff R.F.M.A.S., Inc. (“RFMAS”) objects to a Report and Recommendation issued by Magistrate Judge Michael H. Dolinger, granting in part and denying in part defendants’ motion to exclude at the trial of this action the testimony of plaintiffs experts. For the reasons stated below, the Court adopts the recommendations of Judge Dolinger’s report in their entirety. I. BACKGROUND RFMAS brought this action against defendants Mimi So, Mimi So International, Inc., Richemont SA, Compagnie Financiére Richemont SA, Richemont North America, Richemont Holdings I, and Richemont International, Ltd. (collectively, “Defendants”), alleging, among other things, that Defendants infringed RFMAS’s copyright in nine pieces of its “Stella” jewelry line and infringed the trade dress of the “look” of the Stella collection. On August 30, 2010, Magistrate Judge Dolinger, to whom this matter had been referred for supervision of pretrial proceedings, issued a Report and Recommendation (the “Report”), a copy of which is attached and incorporated herein, recommending that Defendants’ Motion to Exclude Plaintiffs Experts dated December 1, 2009 (the “Motion”) be granted in part and denied in part. Specifically, the Report recommended that RFMAS’s experts Don Smith (“Smith”) and Steve Hansen (“Hansen”) be precluded from testifying at trial as to whether Defendants’ actions damaged RFMAS and, if so, to what extent. However, the Report deemed potentially admissible a limited portion of Hansen’s testimony regarding whether the jewelry featured in Mimi So’s 2006 “Gate B9” catalogue “would only be sold precisely as is depicted.” (See Report at 95-96.) Consequently, the Report recommended that the entirety of Smith’s expert reports and the relevant portions of Hansen’s expert reports be stricken. Further, the Report recommended that RFMAS’s experts Joyce Jonas (“Jonas”) and Edward Lewand (“Lewand”) be permitted to offer testimony regarding the similarities and differences between RFMAS’s and Defendants’ jewelry. However, the Report recommended that these individuals be precluded from offering expert opinions as to the “probable effect in the market” of RFMAS’s Stella line, the distinctiveness of RFMAS’s line, whether or not the Stella line operates as a source identifier and constitutes a protectable trade dress, whether customers are likely to be confused about the source of Defendants’ jewelry, and whether Defendants’ jewelry was copied from RFMAS’s. The Report recommended that the portions of Jonas’s and Lewand’s reports corresponding to these latter issues be stricken. On September 27, 2010, RFMAS filed timely objections to the Report (the “Objections”) challenging certain of the Report’s findings. II. LEGAL STANDARD Pre-trial discovery issues in civil litigation are generally considered non-dis- positive matters. See Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir.1990); MacNamara v. City of New York, 249 F.R.D. 70, 77 (S.D.N.Y.2008); see also 12 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice & Procedure § 3068.2 (2d ed. 2010). In evaluating a magistrate judge’s findings regarding non-dispositive issues such as pre-trial disputes, a district court may modify or set aside a determination only if it is found to be “clearly erroneous or contrary to law.” 28 U.S.C. § 636(b)(1)(A); see also Fed.R.Civ.P. 72(a). A finding is “clearly erroneous” if the reviewing court is “left with the definite and firm conviction that a mistake has been committed.” Easley v. Cromartie, 532 U.S. 234, 242, 121 S.Ct. 1452, 149 L.Ed.2d 430 (2001) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948)). Similarly, a finding is contrary to law “when it fails to apply or misapplies relevant statutes, case law, or rules of procedure.” Catskill Dev., LLC v. Park Place Entm’t, 206 F.R.D. 78, 86 (S.D.N.Y.2002) (internal quotations omitted). Therefore, pursuant to these standards, a magistrate judge’s determinations on discovery matters are entitled to substantial deference. U2 Home Entm’t, Inc. v. Hong Wei Int’l Trading Inc., No. 04 Civ. 6189(JFK), 2007 WL 2327068, at *1 (S.D.N.Y. Aug. 13, 2007) (citing Nikkal Indus., Ltd. v. Salton, Inc., 689 F.Supp. 187, 189 (S.D.N.Y.1988)) (“Consistently, it has been held that a magistrate’s report resolving a discovery discourse between litigants should be afforded substantial deference and be overturned only if found to be an abuse of discretion.”). “The party seeking to overturn a magistrate judge’s decision thus carries a heavy burden.” Id. (citing Catskill Dev., 206 F.R.D. at 86). III. DISCUSSION The Court has reviewed the full factual record in this litigation pertaining to the issues raised by RFMAS’s objections, including the pleadings and the parties’ respective papers submitted in connection with the underlying motion to exclude RFMAS’s experts, as well as the Report and applicable legal authorities. On the basis of this review, the Court concludes that the findings, reasoning, and legal support for the recommendations made in the Report are neither clearly erroneous nor contrary to law. The Report carefully details the backgrounds, assumptions, methodologies and findings of each of RFMAS’s experts and evaluates them in light of the standards for admissibility of expert testimony set out by Rule 702 of the Federal Rules of Evidence, Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), and Kumho Tire Co. v. Carmichael, 526 U.S. 137, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999). The Court finds that the Report’s recitation accurately reflects the factual record and that its legal analyses and determinations are sound. Rule 702 of the Federal Rules of Evidence provides that a qualified expert’s testimony is admissible only “if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.” Fed.R.Evid. 702. In assessing the reliability of expert testimony, the trial court must decide not only whether an expert’s methodology is reliable for some purposes, but whether it is a reliable way “to draw a conclusion regarding the particular matter to which the expert testimony was directly relevant.” Kumho Tire Co., 526 U.S. at 154, 119 S.Ct. 1167. Expert testimony that is merely “subjective belief or unsupported speculation” should be excluded. Daubert, 509 U.S. at 590, 113 S.Ct. 2786. The party proffering the expert has the burden to demonstrate that its expert witness satisfies these criteria. See, e.g., Zaremba v. GMC, 360 F.3d 355, 358 (2d Cir.2004). In its Objections, RFMAS first contends that, contrary to the findings of the Report, the data relied upon and methods employed by its damages experts Smith and Hansen were both sufficient and sound. Specifically, RFMAS argues that Smith and Hansen (1) investigated sufficiently the reasons for the decline in RFMAS’s business with Neiman Marcus; (2) considered alternative causes for the decline in RFMAS’s Neiman Marcus business other than Defendants’ alleged infringement; (3) were not required to apportion damages between the causes of action and the parties; (4) used commonly accepted and justifiable financial projection methods to calculate lost profits and diminished enterprise value; and (5) properly extrapolated from RFMAS’s sales at Saks Fifth Avenue (“Saks”) to project RFMAS’s lost sales at Neiman Marcus. Additionally, RFMAS objects that the Report incorrectly found Smith and Hansen, as well as RFMAS’s liability experts Jonas and Lewand, lacking in certain qualifications relevant to their proposed testimony as experts. The Court will address each of these objections in turn. As to RFMAS’s objections regarding the methods employed by Smith and Hansen, the Court concurs with the Report’s findings and conclusions substantially for the reasons discussed therein. First, the Court disagrees with RFMAS’s apparent argument that Smith and Hansen did not fail to investigate the reason for the decline in RFMAS’s Neiman Marcus business because the deposition testimony of Neiman Marcus representative Lisa Razor (“Razor”) rendered the cause self-evident. (See Objections at 5-7.) Razor’s testimony quoted by RFMAS in its Objections discusses both upward and downward trending of RFMAS’s sales to Neiman Marcus over time, does not explain the reasons for that trending, and makes no mention whatsoever of Defendants or their products. RFMAS’s attempts to “fill in the blanks” of this testimony with unsupported factual assertions is unavailing. Further, RFMAS’s curious assertion that “there was simply no basis for a second deposition of Neiman Marcus conducted by experts, as posited in the Report,” (Objections at 7) (emphasis in original) misses the point; the Report concluded that RFMAS’s counsel could have questioned Razor directly at her deposition as to the reasons for the decline but apparently chose not to do so, and further noted that, in any event, Smith did not even read Razor’s testimony. (See Report at 59-60 and n.44.) Next, RFMAS’s claim that, contrary to the conclusion of the Report, Smith and Hansen sufficiently considered alternative causes for the decline in RFMAS’s Neiman Marcus sales is based solely on a reference to a factual recitation contained in the Report itself. {See Objections at 8.) Yet the portion of the Report to which RFMAS cites observed — correctly in the Court’s opinion — that Smith and Hansen made only conclusory assertions that they failed to find evidence to support several other theories of causation. {See Report at 60, 62 and n.41.) RFMAS fails to identify any other evidence supporting its objection on this point, and consequently, the Court rejects this claim. RFMAS’s argument that Smith’s and Hansen’s methodologies are generally accepted practices similarly misses the mark. Even were the Court persuaded — which it is not — that the models chosen by RFMAS’s experts to forecast lost profits and lost enterprise value were reasonable in general, RFMAS would still fail to meet its burden. RFMAS must show not only that its experts’ methodologies are reliable for some purposes, it must also show that those methodologies are reliable ways “to draw a conclusion regarding the particular matter to which the expert testimony was directly relevant.” Kumho Tire Co., 526 U.S. at 154, 119 S.Ct. 1167. Here, as the Report concludes, RFMAS’s experts “have utterly failed to justify their chosen methodologies in light of the facts of this case.” (Report at 65.) Additionally, RFMAS’s arguments with respect to its experts’ qualifications are either immaterial or irrelevant. First, even if RFMAS were correct that Smith possesses the requisite qualifications to project revenues, that would not change the fact that, as noted above and in the Report, Smith failed to demonstrate that he employed a reliable method in doing so. RFMAS’s arguments regarding its other experts fare no better. RFMAS insists that Hansen is qualified to project revenues, yet the Report never found Hansen unqualified in that regard. Finally, RFMAS’s arguments regarding Lewand and Jonas fail to recognize a pivotal and utterly unfounded assumption: even if, as RFMAS claims, Jonas’s “historical” knowledge of jewelry includes knowledge of the contemporary market, and even if Lewand is an experienced appraiser of contemporary jewelry pieces, that would still not warrant permitting either Jonas or Le-wand to testify to ultimate facts in dispute, and thus invade the province of the jury, for instance concerning the distinctiveness or uniqueness of RFMAS’s Stella jewelry line, whether customers are likely to be confused about the source of Defendants’ jewelry, or whether Defendants’ jewelry was actually copied from RFMAS’s. Accordingly, for substantially the reasons set forth in the Report, the Court adopts the Report’s factual and legal analyses and determinations, as well as its substantive recommendations in their entirety as the Court’s own ruling on Defendants’ Motion. IV. ORDER For the reasons discussed above, it is hereby ORDERED that the Report and Recommendation of Magistrate Judge Michael H. Dolinger dated August 30, 2010 (Docket No. 216) is adopted in its entirety, and the Objections of plaintiff R.F.M.A.S. (Docket No. 230) are DENIED. SO ORDERED. REPORT & RECOMMENDATION MICHAEL H. DOLINGER, United States Magistrate Judge: TO THE HONORABLE VICTOR MARRERO, U.S.D.J.: Plaintiff R.F.M.A.S., Inc. (“RFMAS” or “plaintiff’) is a designer of jewelry sold under the trademark “Faraone Mennella”. (Am. Compl. ¶ 13). It commenced this action against Ms. Mimi So and Mimi So International, Inc. (collectively, “the Mimi So defendants” or “Mimi So”) and Richemont SA, Compagnie Financiere Richemont SA, Richemont North America, Inc., Richemont Holdings I, Inc., and Richemont International, Ltd. (collectively, “the Richemont defendants”) on November 13, 2006. Plaintiff alleges that several pieces in Mimi So’s 2006 “Gate B9” collection of jewelry infringed plaintiffs copyright and trade dress on the design of pieces in its “Stella” collection. {See Decision & Am. Order, May 13, 2009, at 4, available at R.F.M.A.S., Inc. v. Mimi So, 619 F.Supp.2d 39, 47 (S.D.N.Y.2009); Compl. ¶¶ 37-40). Defendants have moved to exclude the testimony of plaintiffs four putative expert witnesses: Don Smith and Steven Hansen, plaintiffs damages experts, and Joyce Jonas and Edward Lewand, plaintiffs liability experts. Defendants argue that their testimony is inadmissible in whole or in part under Federal Rules of Evidence 403, 702, and 703 and the Supreme Court’s decisions in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), and Kumho Tire Co. v. Carmichael, 526 U.S. 137, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999). They seek an order striking the Rule 26(a)(2)(B) reports of these witnesses and precluding plaintiff from calling them as expert witnesses at trial. For the reasons below, we recommend that defendants’ motion be granted in part and denied in part. As we explain below, we recommend that the court exclude the expert testimony of Don Smith in its entirety, and exclude the expert testimony of Steve Hansen, Joyce Jonas, and Edward Lewand in part because as to many of the matters on which these witnesses offer testimony, they are either not qualified as experts or have not demonstrated that their conclusions rest on sufficiently reliable methods and facts. I. STANDARDS FOR ADMISSIBILITY OF EXPERT TESTIMONY A. Federal Rule of Evidence 702, Daubert, and Kumho Expert witness testimony is appropriate only if “scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue”. Fed.R.Evid. 702. In those circumstances, a person who possesses relevant specialized knowledge by virtue of his “skill, experience, training, or education” may testify as an expert witness. Id. “To determine whether a witness qualifies as an expert, courts compare the area in which the witness has superior knowledge, education, experience, or skill with the subject matter of the proffered testimony.” United States v. Tin Yat Chin, 371 F.3d 31, 40 (2d Cir.2004). Rule 702 of the Federal Rules of Evidence provides that a qualified expert’s testimony is admissible only “if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.” Fed.R.Evid. 702. This rule “incorporates the principles enunciated in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993)[,] in which the Supreme Court held that trial courts have a gatekeeping function to ensure that any and all scientific testimony or evidence admitted is not only relevant but reliable.” Discover Fin. Servs. v. Visa U.S.A., Inc., 582 F.Supp.2d 501, 503 (S.D.N.Y.2008) (internal quotations omitted). Subsequent to the Daubert decision, the Supreme Court made clear that the trial court must perform the gatekeeping function outlined in Daubert to determine the admissibility of all expert opinions, not only testimony as to scientific matters. Kumho Tire Co., 526 U.S. at 147, 119 S.Ct. 1167. Under Daubert and Kumho Tire Co., the trial court must determine that the proposed testimony of a qualified expert witness “is not only relevant, but reliable.” Daubert, 509 U.S. at 589, 113 S.Ct. 2786; Kumho Tire Co., 526 U.S. at 137, 119 S.Ct. 1167. This inquiry must focus “not on the substance of the expert’s conclusions, but on whether those conclusions were generated by a reliable methodology.” Trouble v. Wet Seal, Inc., 179 F.Supp.2d 291, 301 (S.D.N.Y.2001). To the extent that a party questions the weight of the evidence upon which the other party’s expert relied or the conclusions generated from the expert’s assessment of that evidence, it may present those challenges through cross-examination of the expert. Park West Radiology v. CareCore Nat’l LLC, 675 F.Supp.2d 314, 326 (S.D.N.Y.2009) (citing Discover Fin. Servs., 582 F.Supp.2d at 507). Minor flaws in an expert’s analysis likewise can be probed through cross-examination and generally go to the weight to be accorded to the expert’s testimony rather than admissibility. However, “[w]hen an expert opinion is based on data, a methodology or studies that are simply inadequate to support the conclusions reached, Daubert and Rule 702 mandate the exclusion of that unreliable opinion testimony.” Nimely v. City of N.Y., 414 F.3d 381, 396-97 (2d Cir.2005) (quoting Amorgianos v. Nat’l R.R. Passenger Corp., 303 F.3d 256, 266 (2d Cir.2002)). In assessing the reliability of the expert testimony, the court must undertake a two-step analysis. First, the court must determine, at least on a preliminary basis, “whether the reasoning or methodology underlying the testimony is scientifically valid”. Daubert, 509 U.S. at 592-93, 113 S.Ct. 2786. The Daubert Court suggested that for scientific methods, the trial judge should assess whether the method or theory “can be and has been tested.” Daubert, 509 U.S. at 593, 113 S.Ct. 2786. This includes a consideration of whether the methodology has been subjected to peer review and publication, the degree to which it has been accepted in the relevant profession or discipline, and the known or potential error rate of the methodology. Id. at 593-95, 113 S.Ct. 2786. For methods or theories that are not purely scientific, the court should follow the same general approach, adapting the Daubert criteria as needed for the purpose of assessing reliability. See Kumho Tire Co., 526 U.S. at 150, 119 S.Ct. 1167. Second, the court must further decide whether that reasoning or methodology is appropriately applied to the case at hand, and whether the expert is applying it in a manner that ensures a reliable linkage between the facts that he is examining and the conclusions that he is announcing. Daubert, 509 U.S. at 592, 113 S.Ct. 2786; Kumho Tire Co., 526 U.S. at 158,119 S.Ct. 1167. In short, the trial court must decide not only whether the methodology is reliable for some purposes, but also whether it is a reliable way “to draw a conclusion regarding the particular matter to which the expert testimony was directly relevant.” Kumho Tire Co., 526 U.S. at 154, 119 S.Ct. 1167. Expert testimony that is merely “subjective belief or unsupported speculation” should be excluded. Daubert, 509 U.S. at 590, 113 S.Ct. 2786; see also Major League Baseball Props., Inc. v. Salvino, Inc., 542 F.3d 290, 311 (2d Cir.2008) (quoting Boucher, 73 F.3d at 21). As the Supreme Court has noted in this context: Conclusion and methodology are not entirely distinct from one another. Trained experts commonly extrapolate from existing data. But nothing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence which is connected to existing data only by the ipse dixit of the expert. A court may conclude that there is simply too great an analytical gap between the data and the opinion proffered. Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146, 118 S.Ct. 512, 139 L.Ed.2d 508 (1997). The party proffering the expert has the burden to demonstrate by a preponderance of the evidence that its expert witness satisfies these criteria. See, e.g., Zaremba v. GMC, 360 F.3d 355, 358 (2d Cir.2004); Aventis Envt’l Science USA LP v. Scotts Co., 383 F.Supp.2d 488, 513 (S.D.N.Y. 2005). B. Expert Report Requirements The Federal Rules require a party that has designated an expert witness for trial to provide the other side with a report prepared and signed by that witness. Fed.R.Civ.P. 26(a)(2)(B). The report must contain, among other things, “a complete statement of all opinions the witness will express and the basis and reasons for them; the data or other information considered by the witness in forming them; any exhibits that will be used to summarize or support them”, and “the witnesses’ qualifications”. Fed.R.Civ.P. 26(a)(2)(B)(i)-(iv). As this language suggests, the report setting forth the expert’s opinions and their factual basis must be “detailed and complete”. See 1993 Advisory Committee Notes to Fed.R.Civ.P. 26(a)(2)(B), at 160. A party may depose the other side’s expert only after the expert provides the required report. Fed.R.Civ.P. 26(b)(4)(A). The drafters of this rule anticipated that the provision of a report would significantly shorten the duration and narrow the scope of depositions of expert witnesses and perhaps in some cases obviate the need for the deposition altogether. Lava Trading, Inc. v. Hartford Fire Ins. Co., 2005 WL 4684238, at *7 (S.D.N.Y. Apr. 11, 2005) (citing 1993 Advisory Committee Notes to Fed.R.Civ.P. 26(a)(2)(B), at 161; Salgado v. Gen. Motors Corp., 150 F.3d 735, 741 n. 6 (7th Cir.1998)). A party that has made a disclosure under Rule 26(a) must supplement or correct its disclosure “in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect”. Fed.R.Civ.P. 26(e)(1)(a). Any expert testimony that is not properly supported and disclosed in a report is presumptively inadmissable unless the noncompliance with Rule 26 was “substantially justified” or “harmless”. Fed. R.Civ.P. 37(c)(1). II. THE PARTIES’ ARGUMENTS Defendants argue that plaintiffs putative damages experts, Mr. Smith and Mr. Hansen, are not qualified to opine on causation in this case, and that their testimony on both causation and the measure of damages rests on an insufficient factual record and is the product of an unreliable analytical framework. (Defs.’ Mem. Law Supp. Mot. to Exclude Pl.’s Experts, Dec. 1, 2009 [“Defs.’ Mem.”], at 4-16; Defs.’ Reply Mem. Supp. Mot. to Exclude PL’s Experts, Dec. 28, 2009 [“Defs.’ Reply Mem.”] at 2-9). Although defendants focus primarily on Mr. Smith and Mr. Hansen, they also argue that plaintiffs liability experts, Mr. Lewand and Ms. Jonas, are not qualified to opine on many of the matters on which they offer testimony, that they reached their conclusions by way of unreliable methodologies, and that, in any event, no expert testimony on liability is necessary in this ease. (Defs.’ Mem. at 1, 18-19; Defs.’ Reply Mem. at 9-10). In support of their motion, defendants offer the testimony of two of their own expert witnesses, who in part respond to the testimony of plaintiffs experts. Michelle Riley is a licensed CPA and has been qualified as a damages expert in many federal cases. (See Michele M. Riley Report, Oct. 15, 2009, Ex. 10 to Richard Lehv, Esq. Decl., Dec. 1, 2009 [“Riley Report”] at 1 ¶ 1; Ex. 1 to id. (curriculum vitae)). Ms. Riley testified that Mr. Smith’s and Mr. Hansen’s analyses of plaintiffs damages are speculative because they failed to investigate the facts relevant to determining causation and quantifying the alleged harm and did not support their conclusions with sufficient analysis. (See Riley Report at 2-3 ¶ 7). Carolyn Kelly has extensive experience in the fine jewelry industry, including experience in product development, experience working at both retailers and wholesalers, and nine years of service as Divisional Manager of Fine Jewelry for Saks Fifth Avenue. (Carolyn M. Kelly Report, Oct. 14, 2009, Ex. 14 to Richard Lehv, Esq. Deck, Dec. 1, 2009 [“Kelly Report”] at 1). She compared some of plaintiffs and defendants’ pieces of jewelry and opined on their similarities and differences from aesthetic and commercial perspectives. (Id.). Ms. Kelly concluded that neither the Stella collection nor the Gate B9 collection was unique, that the two lines cater to different consumer markets, and that defendants’ Gate B9 collection likely could not have affected plaintiffs business. (Id. at 2-4). Plaintiff responds that defendants have not identified any inaccuracies in the factual record relied upon by its experts, and that its experts’ testimony is not rendered inadmissible simply because other experts disagree with their conclusions. Plaintiff further argues that the alleged flaws in its experts’ analysis, including the damages experts’ alleged failure to rule out alternative causes, are minor and do not compel exclusion of their expert testimony. (Pl.’s Mem. Law Opp. Mot. to Exclude, Dec. 18, 2009 [“Pl.’s Mem.”] at 1, 6, 17). We consider these arguments below. III. PLAINTIFF’S DAMAGES EXPERTS Plaintiff retained two experts, Don Smith and Steve Hansen, to offer testimony in support of plaintiffs case on damages. Plaintiff asked these experts to assume that all defendants were liable on all causes of action in this case, and to determine whether defendants’ collective copyright and trade dress infringement, misappropriation of plaintiffs proprietary information and trade secrets, and breach of contract impacted plaintiffs sales and profits and the value of plaintiffs brand and intellectual property, and if so, what the total amount of damages is. (Don E. Smith Report, Sep. 15, 2009, Ex. 1 to Richard Lehv, Esq. Deck, Dec. 1, 2009 [hereinafter “Smith Report”], at 2; Steven L. Hansen Report, Sep. 14, 2009, Ex. 2 to Richard Lehv, Esq. Deck, Dec. 1, 2009 [“Hansen Report”], at 3-4). It appears that Mr. Smith and Mr. Hansen collaborated on their analysis. Smith consulted Hansen before issuing his own opinions, and Smith’s and Hansen’s reports cite each other. Hansen’s report also purports to assess “the applicability and reasonableness of the findings of Don Smith.” (Hansen Report at 3). Because their testimony is so inextricably and circularly connected, we will analyze the admissibility of their opinions together. A. Don Smith Don E. Smith is the president and primary consultant at a marketing consulting firm that he founded in 1989. (Smith Report at 1, 21). His work as a marketing consultant includes experience “defining market sizes, growth rates, [... and] competitive strengths and weaknesses”, and creating strategies to increase market share, sales, and profits. (Id. at 21). He states that he has “25 years of experience in the marketing and sales management of Fortune 500 companies” (id. at 2), and his resume indicates that he has taught courses in these areas. Mr. Smith also asserts that he has experience involving the development and launch of new products. (Id. at 2). 1. Smith’s Assumptions In his initial report, Smith identified in broad terms the legal wrongs that he assumed defendants committed: “I am assuming the defendants infringed the plaintiffs copyrights and trade dress, misappropriated confidential information/trade secrets and breached their contract.” (Smith Report at 2). He elaborated somewhat on some of these assumptions later in his report. He specified that “[fjrom October 2004 to September of 2006, RFMAS had meetings with personnel from Mimi So and Richemont. Under the protection of a signed confidentiality agreement, the plaintiffs shared their records, plans, strategies, pricing, which designs are the best sellers, specific methods of dealing with customers and other confidential/trade secret information.” (Id. at 6 ¶ 3 (citing Am. Compl. at 6)). He added, “[a]fter the in-depth discussions with the plaintiff, the defendants! ] entered the market with a direct infringement of the plaintiffs copyright,” and he reiterated, “[f|or the purposes of this report, I am assuming infringement.” (Id. at 4). He did not specify which of plaintiffs designs he assumed were copyrighted and infringed upon or which Mimi So products were infringements of plaintiffs intellectual property. At points, his initial report discussed the alleged infringement as if it were of one piece, but elsewhere it indicated that there were 61 allegedly infringed RFMAS products. (See id. at 19 (Table 9)). It also cited to the expert reports of Ms. Jonas and Mr. Lewand, who seemed to believe that there were nine pieces of copyrighted Faraone Mennella jewelry that were infringed by nine pieces of Mimi So jewelry. Smith’s report did not mention either the Stella collection or the Gate B9 collection. His report also seemed to assume that Mimi So was directly responsible for the style of a particular Neiman Marcus ad for Mimi So jewelry, although he did not make this assumption explicit in the initial report. (See Smith Report at 4-5 & n.ll; id. at 6 (“Mimi So’s ‘knock-off advertisement showing a model wearing the infringing necklace was placed in October 2006.”)). He expressed his opinion “[a]s a marketing professional” that the Nieman Marcus ad, for which he assumed Mimi So was responsible, “had the clear potential and intent to confuse the customer” because of its similarity to plaintiffs ad. (Id. at 5). At his deposition, he explained that, based on his marketing expertise, he could not imagine that the ad could have been created without Mimi So’s input. (Smith Dep. at 145). Apart from asking Steve Hansen for his opinion on the matter, Smith made no effort to find out whether Mimi So had in fact been involved in the production of the ad. (Id. at 145-46). Hansen reportedly assured Smith that it was “absolutely [... ] not possible” that Mimi So had not been involved at all in the creation of the ad. (Id. at 146). Smith’s explanation of Richemont’s role in causing plaintiff to lose business with Neiman Marcus consisted of the observations that “[i]n early 2004, Richemont acquired a minority equity share of Mimi So”, that Ms. So publicly commented on the partnership and her desire to grow her company internationally, that an executive from Richemont participated in conversations with plaintiff, and that “Hansen believes that Richemont personnel had a significant influence in Neiman Marcus’ dramatically reduced purchases.” (Id. at 7 ¶¶ 7-8). At his deposition, he confirmed that he had not formed any opinion of his own as to whether Richemont had played a role in causing the decline in plaintiffs sales to Neiman Marcus. 2. Evidence Reviewed by Smith Mr. Smith’s findings as to causation and damages rested almost exclusively on the documents that plaintiff provided, although he testified at his deposition that he also ran searches on Google and Lexis Nexis for unspecified key words, and asked plaintiffs counsel and plaintiffs other damages expert, Steve Hansen, to verify his findings. The totality of his deposition testimony suggests that he did not view his assignment as encompassing a requirement that he do any investigation beyond reviewing the materials provided to him. It appears that plaintiff provided Mr. Smith with some raw data (including some RFMAS invoices and Mimi So sales records) as well as reports summarizing RFMAS’s annual sales and the content of various RFMAS invoices as well as defendants’ revenues. (See id. at 24). Plaintiff also provided Mr. Smith with information from the Wall Street Journal and Federal Reserve on the current and historic prime rate, a February 2004 article in Professional Jeweler entitled “Richemont Partners with Mimi So”, the complaint in this action, and the expert reports of Steve Hansen, Joyce Jonas, and Ed Lewand. (See id.). Mr. Smith’s initial report did not identify the provenance of the summary documents on which he based his conclusions. At his deposition, he explained that the summaries of plaintiffs sales that he reviewed had been prepared by Elana Anderson, an accountant retained by plaintiffs law firm, and that he had “spot-checked” her accounting against some of the original invoices on which she had based her report. (Don. E. Smith Dep., Oct. 2, 2009, Ex. 5 to Richard Lehv, Esq. Deck, Dec. 1, 2009/Ex. 1 to Kenneth Feldman, Esq. Deck, Dec. 18, 2009 (“Smith Dep.”), at 22) . He did not review plaintiffs profit-and-loss statements, balance sheets, tax returns, or any other original RFMAS financial reports. (Id. at 33). He also relied on a “Gate B9 Revenue Calculation Spreadsheet” purportedly summarizing Mimi So sales information that plaintiffs counsel prepared. (Id. at 55-58). He did not independently verify any of the statements in this summary. (Id. at 58). 3. Smith’s Findings as to Causation Mr. Smith concluded in his initial report that defendants’ various unlawful acts caused a decrease in RFMAS’s sales and profits and the value of RFMAS’s brand. He observed that, in 2006 and 2007, plaintiffs total sales fell by 48%, plaintiffs sales of the infringed products fell by 81%, and plaintiff lost Neiman Marcus as a customer — a major blow to plaintiff, considering that, in his opinion, Neiman Marcus was “an extremely important retailer” to plaintiff; sales to Neiman Marcus represented 50% of plaintiffs total annual sales in 2006. (Id. at 6). Smith opined that the decline in sales to Neiman Marcus translated directly into lost profits. (Id. at 7). Mr. Smith also posited that the loss of Neiman Marcus as a client caused a diminution in the “perceived value of the [RFMAS] brand in the eyes of other retailers and consumers”, explaining that marketing professionals commonly gauge the value of a company’s brand based on the company’s “commercial successes” and the press that it receives in “quality publications”. (Id. at 8). However, later in the report he seemed to reverse his theory of causation with respect to the diminution in brand value, asserting that the loss of brand value caused the drop in plaintiffs sales to Neiman Marcus. (See id. at 10 (“There is clearly a loss of brand and intellectual property value. It is not possible to precisely quantify this loss. However, it is one of the key reasons for the $3,230,000 loss of profits to Neiman Marcus (Section B).”)). Mr. Smith opined that the loss of Neiman Marcus as a customer and the concomitant declines thereafter in plaintiffs sales, profits, and brand value were due to defendants’ unlawful activities. He explained this conclusion primarily by pointing to a temporal proximity between plaintiffs loss of Neiman Marcus as a customer and the release in 2006 of Mimi So’s allegedly infringing jewelry. Smith asserted that in 2006, Mimi So began selling its infringing jewelry to Neiman Marcus, citing to a May 2006 invoice to Neiman Marcus. (Id. at 5 & n. 12, 6). Smith also pointed to an October 2006 Neiman Marcus advertisement featuring a model wearing Mimi So’s allegedly infringing necklace that was, in his opinion, misleadingly similar to one of plaintiffs ads. (Id. at 6). He noted that from 2002 to 2006, plaintiffs sales “never decreased, even in the recession.” (Id. at 3). However, Smith observed, plaintiffs sales to Neiman Marcus began to decline in the fall of 2006, which was right around the time that Neiman Marcus began advertising Mimi So’s infringing jewelry and Mimi So’s sales to Neiman Marcus began to “rapidly increase”. (Id. at 6). His report contains a graphical timeline illustrating events between December 2002 and August 2009 that also appears in Mr. Hansen’s report; it is unclear who created it. (Compare Hansen Report at 8 (Graph 2) with Smith Report at 5 (Graph 2)). On this graph, the creator plotted plaintiffs total sales to Neiman Marcus for the prior 12 months and plaintiffs total sales to Saks for the prior 12 months. (Id.). Both lines reflected a general increase in plaintiffs total annual sales to each of these retailers through September 2006, and thereafter, a general decline in plaintiffs total annual sales to Neiman Marcus and a general increase in plaintiffs total annual sales to Saks Fifth Avenue. (See id.). The graph also indicates the timing of the events that Smith and Hansen assumed had occurred: defendants’ accessing plaintiffs proprietary information and the release of the Neiman Marcus “knockoff’ ad for Mimi So jewelry in November 2006. (Id.). The graph highlights Mimi So’s first sales to Neiman Marcus in May 2006 and a “rapid[ ] increase” in Mimi So’s sales from January 2007 through December 2007. (Id.). Smith also relied on the fact that, at the same time, plaintiffs sales to Saks (to which Mimi So did not sell infringing jewelry) continued to increase. (Id. at 7; see also id. at 5 (Graph 2)). His report stated that “95% of the products sold by Saks were also sold by Neiman Marcus. This supports the basis for my comparison of the sales of Saks and Neiman Marcus.” (Smith Report at 19). He reiterated at his deposition and in his supplemental report that he thought that plaintiffs sales to Saks should generally be similar to its sales to Neiman Marcus because “95% of the allegedly infringed] products sold by Saks were also sold by Neiman Marcus”, which, Smith opined, “clearly shows that Neiman Marcus and Saks sold similar products.” (Smith Suppl. Report at 1; see also Smith Dep. at 166-67 (“Q: Is it your belief [that Saks and Neiman Marcus] sell a similar mix of products? A: Yes! Go back to Table 9. The overlap is 95 percent on infringed product. 95 percent overlap. [... ] That’s pretty similar.”)). However, the table that Smith offered to support this assertion does not demonstrate what Smith claims it does. In this table, listed in one column labeled “item” are 61 different combinations of letters and numbers that we infer refer to individual pieces of protected RFMAS jewelry that plaintiff alleges were infringed by defendants. (See Smith Report at 19 (Table 9)). In the next two columns, labeled “Neiman Marcus” and “Saks”, Smith lists dollar amounts that we infer are Neiman Marcus’ and Saks’ revenues from sales of each particular piece of RFMAS jewelry through August 2009. (See id. & n. 51). The table seems to reflect that revenues from sales of all allegedly infringed RFMAS jewelry at Neiman Marcus total $1,733,046, while revenues from sales of all allegedly infringed RFMAS jewelry at Saks total $884,014. (See id.). Below these revenue totals are two lines, which read “$ also sold by NM: $836,044” and “% also sold by NM: 95%”. (Id.). It appears that “$ also sold by NM” refers to the total revenues from sales at Saks of the specific pieces of allegedly infringed Stella jewelry that were also on offer at Neiman Marcus, and that he derived the 95% figure by dividing $836,044 by $884,-014 — revenues from sales at Saks of all allegedly infringed Stella goods divided by revenues from sales at Saks of the allegedly infringed Stella goods that were also sold at Neiman Marcus. Thus, the 95% figure is not actually, as Smith claims, the percentage of allegedly infringed Stella products sold by Saks that were also sold by Neiman Marcus; rather, the table demonstrates that 95% of Saks’ revenues from sales of allegedly infringed Stella pieces were from the sale of pieces that were also sold at Neiman Marcus. In his initial report, Mr. Smith added in passing, “I have considered alternative theories of causation including the economy, the potential shift of consumer preferences and Neiman Marcus dropping the plaintiffs for other reasons. However, I did not find any documents or evidence that could explain why Neiman Marcus’s sales of RFMAS fell so rapidly.” (Id. at 7). He explained the reasons for his conclusions that defendants’ unlawful activities damaged the value of plaintiffs brand as follows: The defendants’ actions were the necessary, immediate and direct cause of signifieant damage to RFMAS’ brand. The basis for this conclusion: 1. Loss of Neiman Marcus as a significant retailer. This is especially damaging because Neiman Marcus is one of the most prestigious retailers of luxury goods in the United States. Losing the business of a premier luxury goods retailer like Neiman Marcus is a major setback in development and growth of a branded luxury goods business. The loss of Neiman Marcus as a customer diminishes the perceived value of the brand in the eyes of other retailers and consumers.[] 2. Mimi So introducing a copy that had questionable design integrity and confusing similarity into the luxury goods retail market.[] 3. The appearance in the market of copies that usurped the uniqueness of the plaintiffs’ products. This product confused consumers and retail buyers concerning the value, integrity and authenticity of the plaintiffs’ jewelry.[] 4. Market confusion. Editors and customers were commonly confused and forced Amedeo Scognamiglio and Faraone Mennella to try to explain the unexplainable. This confusion directly reduced sales.[] 5. My review of the expert reports written by Steve Hansen, Joyce Jonas, and Ed Leward [sic] and telephone conversations with Steve Hansen. [] (Smith Report at 8-9 & nn. 26-30). 4. Smith’s Findings as to Damages Mr. Smith determined that plaintiff lost $5,223,000 in profits from loss of sales of all RFMAS products to Neiman Marcus that is attributable to defendants’ assumed misconduct. Of that total, $3,230,000 represented the lost profits from lost sales to Neiman Marcus of the infringed products alone. (Id, at 10). He also opined that defendants generated $1,402,000 in sales of infringing products, $1,156,000 of which was from sales to retailers other than Neiman Marcus. (Id. at 10, 15, 16). Finally, he determined that it was not possible to quantify the damage that defendants caused to the value of plaintiffs “brand and intellectual property”. (Id.). (a) Plaintiffs Lost Sales Mr. Smith based his calculation of plaintiffs lost profits on five points of data: plaintiffs actual sales to Neiman Marcus of all RFMAS products in 2002, 2003, 2004, 2005, and 2006. After plotting these five data points on a graph, he used a pre-set function in Microsoft Excel to generate a “best-fit line”. (Id. at 12). He explained this approach later in his report: The use of trend lines to forecast sales is very common practice for marketing professionals. It is very common practice to use trend lines on historic sales to forecast future sales. For example, these graphs were created on a standard feature of Microsoft Excel. The software calculates the best fit line using different types of curves, calculates the correlation coefficient, defines the equation and will plot the forecast. (Id. at 17 & n. 46). At his deposition, Mr. Smith defended his choice of growth curve as being “very common”, and a “classic” means of projecting future sales of new products, citing the “extraordinarily high” success rate for “mom and pop restaurantes]”. (Smith Dep. at 221-22). However, he acknowledged that he had no idea what the success rate was for new products in the jewelry industry, specifically, and that he had not researched this fact. (Id. at 222-224). He also conceded that he undoubtedly would have relied on such data if it had been provided to him. (Id. at 224). Mr. Smith then extended this linear trend line out through 2013 to determine what plaintiffs total sales of all RFMAS products to Neiman Marcus would have been for 2006 through 2013 “but for” defendants’ unlawful activity. (See id. at 12-13). Mr. Smith asserted that it was conservative to project lost sales for only five years, and explained that he took this conservative approach because the principals of RFMAS had indicated to him in telephone conversations that “there is no basis to expect Neiman Marcus to begin selling significant quantities of RFMAS products.” (Id. at 13; see also id. at 13 n. 36). For the years 2006 through 2009, Mr. Smith subtracted plaintiffs actual sales to Neiman Marcus from the projected “but-for” sales to Neiman Marcus to determine plaintiffs lost sales. (Id. at 13). For the years 2010 through 2013, the projected “but-for” sales represented plaintiffs lost sales, since there were no actual sales to Neiman Marcus in those years to subtract. (See id. (Table 3)). (b) Plaintiffs Lost Profits To calculate lost profits for 2006 through 2013, Mr. Smith multiplied lost sales for those years by 0.36. (Id. at 13). He asserted that a 36% “incremental profit rate” was “conservative” (id.), citing a telephone conversation with Steve Hansen, plaintiffs other damages expert. (Id. at 13 & n. 37). Smith did not base this profit rate on an examination of RFMAS’s historical profit margin, although he conceded at his deposition that that factor would be relevant to a determination of the company’s future profit margin. (See Smith Dep. at 33, 37). He then determined the present value of those lost profits by applying a “present value multiplier” based on a 5% annual decrease in the value of money. (Id. at 13). Mr. Smith asserted that this rate was “consex'vative.” (Id.). In support of this assertion, he noted that the prime rate on August 26, 2009 was 3.25%, and observed that “[a] common guideline is to use 1% over prime. Thus a 5% discount for future profits is conservative. The prime rate in 2007 was 8.1% and 5.1%. Thus, a 5% discount for historic profits is also conservative.” (Id. at 13 n. 38). Finally, he added together the present value of the lost profits for 2006 through 2013 to arrive at a total of $5,223,000 in lost profits (present value) from sales of all RFMAS products to Neiman Marcus. (Id. at 13). Although Smith opined that the present value of lost profits from sales to Neiman Marcus of all RFMAS products was án appropriate measure of damages in this case, he separately calculated the present value of plaintiffs lost profits from sales to Neiman Marcus of only the infringed goods. (Id. at 17). He began again with five points of data, but this time, he used plaintiffs actual sales of infringed products only (rather than all RFMAS products) to Neiman Marcus in 2002, 2003, 2004, 2005, and 2006. He then applied the same methodology and rates, arriving at a present value of $3,230,000 in lost px’ofits from lost sales to Neiman Marcus of infringed products. (Id. at 17-18). (c) Defendants’ Profits Smith also calculated defendants’ sales from infringing goods, on the theory that plaintiff would be entitled to defendants’ profits from infringing goods and that it is incumbent upon defendants to demonstrate the related sales expenses that should be deducted from revenues to determine profits. (Id. at 15 & nn. 40, 42 (citing conversations with K. Feldman, plaintiffs attorney)). He added together figures from a document entitled “Gate B9 revenue calculation spreadsheet”, which plaintiffs counsel provided to him, and concluded that, based on those figures, defendants’ total sales of infringing products through September 4, 2009 were $1,402,297, of which $1,156,000 were sales to retailers other than Neiman Marcus. (Id. at 15-16 & nn. 41, 43, 44). B. Steven Hansen Steven L. Hansen is a licensed CPA. (Hansen Report at 2). Since 1987, he has served as the CFO of many jewelry companies. (Id.). He asserted in his report that he has “[e]xperience in evaluating and quantifying the impact of incremental and/or lost financial and business opportunities with financial forecasting and modeling techniques.” (Id.). 1. Hansen’s Assumptions Hansen’s initial report states that he “was asked to assume infringement, misappropriation of trade secrets and breach of contract occurred”. (Hansen Report at 4). He later specified that these actions “included], but [were] not limited to, the introduction of a competing knocked off product, and the use of confidential business and trade secrets to undermine the Plaintiffs supplier relationship with Neiman Marcus”. (Id. at 9). The scattered references in Hansen’s report to defendants’ misuse of plaintiffs confidential information and trade secrets provide additional insight into the nature of his assumptions. He stated that, from October 2004 through September 2006, plaintiff shared “detailed confidential information with defendants”. (Id. at 8 (Graph 2)). He described this information as “proprietary information about [plaintiffs] products and customers” that was “sufficient to enable the defendants to knock off RFMAS’ best selling jewelry products and go after its best customer”, and he stated that defendants “[had] access to and us[ed] the confidential and proprietary information of what particular pieces in the line are popular, what characteristics of the design are important to copy, and all of the other customer program specific information”. (Id. at 8). He later summarized: In good faith, and under the auspices of a confidentiality and implied non-competition agreement plaintiffs entered into merger discussions and gave Richemont all information it requested about its products, sales practices, customer relationships, and marketing programs. By misappropriating these trade secrets, copying the products and pursuing expansion of its luxury goods vendor relationship with Neiman Marcus, all in violation of the confidentiality agreement, Richemont clearly further leveraged itself and Mimi So into the Neiman Marcus relationship and damaged RFMAS[’] business. (Id. at 9). At Hansen’s deposition, when asked what confidential information defendants had misappropriated in order to copy plaintiffs products, he first replied that “[o]nce they understood how the — how the products were constructed, they could construct [... ] identical products to compete”. (Steven L. Hansen Dep., Oct. 2, 2009, Ex. 6 to Richard Lehv, Esq. Deck, Dec. 1, 2009/Ex. 2 to Kenneth Feldman, Esq. Deck, Dec. 18, 2009 [“Hansen Dep.”] at 61). When confronted with the fact that plaintiffs Stella jewelry and defendants’ Gate B9 jewelry are not constructed in the same manner, Hansen conceded this and changed his answer, asserting that defendants used plaintiffs trade secrets to learn the “general design criteria and methods of forming the ideas of how the jewelry was created and the looks and aesthetic appearance that was of the jewelry, more precisely than you could just by — by looking at it in stores and magazines.” (Id. at 62). When pressed for specifics as to the pieces of information that defendants allegedly misappropriated, he responded, “information concerning the trade secrets and operating practices of the company”. (Id. at 63). When asked to explain how this confidential information would allow defendants to make a better copy of plaintiffs jewelry than they could simply by examining the jewelry, he changed his answer to “information concerning their design practice and — and theory”. (Id. at 63-64). He conceded that he was unable to explain what such information could possibly consist of, because he was not an expert in design practice and theory. (Id. at 64). He also explained at his deposition that he assumed that the breach of contract had arisen out of “[t]he Richemont RFMAS nondisclosure agreement, confidentiality agreement.” (Id.). He had assumed that all defendants had breached the contract, although he admitted that he was unsure whether Ms. So or Mimi So, International were parties to the contract that he was assuming had been breached. (Id. at 65). He conceded that he had made no assumptions about whom defendants had allegedly disclosed the confidential information to, and that he had not asked plaintiff about this. (Id. at 65-66). 2. Evidence Reviewed by Hansen Mr. Hansen reached his conclusions after reviewing documents provided to him by plaintiff; he did no independent investigation. (Hansen Dep. at 108-09). The documents he reviewed included those provided to both him and Mr. Smith as well as substantial testimony from witnesses in this case and communications between RFMAS and Richemont, including those parties’ non-disclosure agreement. (See Hansen Report at 23). Like Mr. Smith, Mr. Hansen only examined “some of the actual invoices” that plaintiffs accountant had summarized. (Hansen Dep. at 142). 3. Hansen’s Findings as to Causation Mr. Hansen’s initial report concluded that “[t]he defendants destroyed the relationship and future business opportunities with the Neiman Marcus retail chain and greatly diminished the enterprise value of RFMAS,” and thus, that “the Defendants!”] actions are a necessary, immediate, and direct, cause of RFMAS’ damages”, including lost profits and a diminution in the value of RFMAS’s copyrights. (Hansen Report at 6). He purported to base this conclusion on (1) his knowledge of what makes a jewelry business successful, (2) his perception that the parties’ jewelry was marketed in similar ways, (3) anecdotal evidence that some customers were confused by the similarity between the parties’ jewelry and marketing, and (4) an examination of the timing of various event's in the development of the parties’ relationship with each other and of trends in their respective sales to Neiman Marcus and Saks. With respect to the first consideration, he explained that “wholesale buyers at retail stores and ultimately consumers seek the latest and most appealing creative design! .... ] When copying occurs it creates confusion in the marketplace and destroys the unique appeal of the jewelry.” (Id. at 7). Thus, he reasoned, defendants’ infringement diminished plaintiffs brand recognition and reduced its revenues and therefore profits. As for the second and third considerations, Mr. Hansen examined a Neiman Marcus ad for plaintiffs jewelry and a Neiman Marcus ad produced a year later promoting Mimi So’s jewelry, and opined in his initial report that they were “essentially the same ad, with the same jewelry, posed the same way.” (Id. at 14). However, at his deposition, he was shown higher-quality reproductions of the ad, which allowed him to see details he had missed before. (Hansen Dep. at 154). He conceded that, upon closer inspection, the ads actually appeared dissimilar. (Id. at 155). He asserted that his initial opinion that the ads were similar was consistent with the “testimony that people have been confused by the Defendants’ jewelry and its marketing into believing it is associated with RFMAS”. (Hansen Report at 14). Invoking his understanding of how jewelry advertisements are produced, he posited that defendants would likely have played a role in the creation and approval of the Neiman Marcus ad. (Id.). Thus, he concluded, defendants’ infringement of plaintiffs jewelry design and the similarity of the parties’ advertisements were likely both intentional. Finally, Hansen set forth the same graphical time line of purportedly significant events between December 2002 and August 2009 that appears in Mr. Smith’s report. (Compare Hansen Report at 8 (Graph 2) with Smith Report at 5 (Graph 2)). He observed that after plaintiff shared information with defendants and after Neiman Marcus began to advertise Mimi So’s allegedly infringing jewelry, plaintiffs sales to Neiman Marcus tapered off, even though plaintiffs sales to Saks continued to rise. (Id. at 10). He noted that Saks was similar to Neiman Marcus but that Mimi So had not sold the allegedly infringing jewelry to Saks, and concluded that defendants’ actions must have caused the tapering off of plaintiffs sales to Neiman Marcus: (Id. at 9). At his deposition, he explained that he believed that plaintiffs sales at Saks continued to rise because of increasing customer demand for the pieces, but he conceded that he had not investigated why plaintiffs sales to Saks rose. (Hansen Dep. at 131). He also explained in his supplemental report that he thought plaintiffs sales to Saks were a good predictor of plaintiffs sales to Neiman Marcus absent defendants’ misfeasance because Saks and Neiman Marcus are “competitors”, citing statements on the two companies’ Wikipedia entries and in their 10-K filings with the SEC. (Hansen Suppl. Report at 2). Given my experience in the business, the subsequent destruction of the Neiman’s opportunity was not a coincidence, but the result of Defendants!’] actions, including, but not limited to, the introduction of a competing knocked[-]off product, and the use of confidential business and trade secrets to undermine the Plaintiffs supplier relationship with Neiman Marcus!.] The timing of the introduction of the infringing product with the peak fall selling season suggests that the defendants used confidential information obtained in merger discussions to steal RFMAS business at the most lucrative time of the year. Mr. Hansen also mentioned a few alternative explanations for the decline in plaintiffs sales to Neiman Marcus, and rejected them all, with varying degrees of consideration and explanation. First, he stated that, based on his knowledge of revenue trends in the jewelry industry, the drop-off in sales to Neiman Marcus could not be attributed to normal revenue fluctuations. Second, he observed that plaintiffs deposition of a buyer for Neiman Marcus “did not indicate the presence of any issues of product quality, delivery issues, changes in buying office personnel or direction, or insufficient sell[-]through of RFMAS products as a cause for the abrupt and precipitous decline in purchases from the company” (id. at 11), and dismissed those theories as possible causes of the drop-off in sales because of a “lack of evidence”. (Id. at 12). He also observed in his report that, “[i]n the jewelry trade, the immense relationship leverage enjoyed by a luxury brand vendor like Richemont with a retailer like Neiman Marcus is difficult if not impossible to compete with.” (Id. at 9). However, he did not explain why this competitive advantage over RFMAS could not have caused the decline in plaintiffs sales to Neiman Marcus. Instead, he concluded that “it is clear that without violating the confidentiality provisions of its discussion [sic] and using knowledge and trade secrets obtained directly from RFMAS, and without copying the jewelry products of RFMAS, defendants would not have been able to compete successfully for this share of Neiman Marcus business.” (Id. at 9). In his supplemental report, he added that the decline in plaintiffs sales at Neiman Marcus and the contemporaneous increase in sales at Saks could not have been the result of customers shifting from Neiman Marcus to Saks because such a phenomenon would be “fantastic” and, based on his experience in the industry, unprecedented. (Hansen Suppl. Report at 3). 4. Hansen’s Findings as to Damages Mr. Hansen endorsed Mr. Smith’s methodology for calculating RFMAS’s lost profits as “reasonable”. (Id. at 16, 17). He based this conclusion on his review of Smith’s report and the sales information that Smith relied on, as well as additional information about RFMAS’s customers and financials compiled by RFMAS and RFMAS’s federal income-tax returns. (Id. at 16-17). Hansen explained that, based on his “experience and knowledge of a developing jewelry company,” a 36% incremental profit rate was “reasonable and conservative”. (Id. at 17). With respect to Smith’s finding that RFMAS’s lost sales to Neiman Marcus amounted to approximately $5.2 million in present-day dollars, Hansen observed that this conclusion was “reasonable” but also “conservative”. (Id at 16,17). He opined that Smith had “substantially understate[d] the loss suffered by RFMAS, in several respects”. (Id. at