Plaintiff-Appellant Makina Ve Kimya Endustrisi A.S. (“MKE”) appeals from a judgment of the United States District Court for the Southern District of New York arising from MKE’s suit against Defendants-Appellees for their unauthorized use of MKE’s wordmark and logo in connection with soliciting customers to purchase MKE ammunition.
MKE challenged the judgment insofar as it granted Defendants-Appellees’ motion to exclude the testimony of Pamela O’Neill, MKE’s damages expert, regarding reasonable royalty and corrective advertising damages.
Business Valuation Expert Witness
Pamela M. O’Neill has spent more than 30 years as a valuation professional and has directed more than 900 valuation assignments. Early in her career, she was called to testify before the New York Stock Exchange Arbitration Panel and was cited by the Panel as “an excellent expert witness”.
Her international valuation career has included significant assignments in North America, South America, Europe, Asia, the Middle East, Australia, and New Zealand. She has prepared expert reports for litigation purposes as well as for financial and tax reporting, dispute resolution, investigations, antitrust matters, negotiations, acquisitions, divestitures, reorganizations, solvency and bankruptcy.
Discussion by the Court
To determine reasonable royalty damages, O’Neill calculated a royalty rate based on the royalty rates from six licensing agreements that she asserted were comparable to the license, and which would have resulted from a hypothetical negotiation between MKE and Defendants-Appellees for the “MKE” wordmark and logo when the infringement began. In doing so, however, O’Neill considered only the fact that the six licensing agreements concerned the same broad industry (“ammunition”) without accounting for any differences in the type of intellectual property, product, or royalty payment structure at issue. The District Court did not manifestly err in excluding the testimony on the ground that her royalty rate calculation was based on insufficient facts and data and that there was “simply too great an analytical gap between the data and the opinion proffered.”
O’Neill determined corrective advertising damages by calculating MKE’s combined spending on “Marketing, Sales, & Distribution” as a percentage of revenue for each year between 2013 and 2021, and applying the differential percentage spent in 2022 to the revenue MKE generated in 2022.
But this calculation provided O’Neill only with the total dollar amount MKE spent on all of marketing, sales, and distribution in 2022 over what it had spent historically, not how much of that spending constituted corrective advertising in response to Defendants-Appellees’ infringement. It was not error for the District Court to find that O’Neill’s conclusion lacked a sufficient factual foundation.
The Second Circuit found that the District Court properly excluded expert testimony that lacked sufficient factual foundation, as O’Neill’s reasonable royalty calculation failed to account for key differences between licensing agreements and her corrective advertising calculation was too speculative.
Held
The Second Circuit affirmed the District Court’s judgment in all respects, including the exclusion of O’Neill’s testimony.
Key Takeaway
A decision to exclude is not an abuse of discretion unless it is manifestly erroneous.
Case Details:
| Case Caption: | Makina Ve Kimya Endustrisi A.S. v. A.S.A.P. Logistics LTD |
| Docket Number: | 25-1807 |
| Court Name: | United States Court of Appeals for the Second Circuit |
| Order Date: | April 30, 2026 |
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