Written by Chris Walton, JDRAW rolling papers versus Raw Garden cannabis products. A six-year trademark war between a smoking-accessories brand and a California cannabis company, tried in the District of Arizona before Judge Liburdi. Before the case reached a jury, both sides filed Daubert challenges against each other’s damages experts. Both challenges partially succeeded. The plaintiff’s expert was excluded in part for relying on an undisclosed license agreement and using unsupported assumptions. The defendant’s expert was limited because his “but-for” expense methodology lacked adequate support — but his apportionment analysis, grounded in consumer-confusion survey data, was allowed to proceed.
BBK Tobacco & Foods LLP v. Central Coast Agriculture, Inc. (D. Ariz. Jan. 31, 2025) is the most granular application of the amended Rule 702 to competing trademark damages experts in the current pipeline. Unlike Sullivan (expert excluded entirely for wrong credentials) and Weber (expert excluded entirely for unreliable AI tool), BBK shows what partial exclusion looks like in practice: the court didn’t reject either expert wholesale. It dissected each expert’s analysis component by component, keeping the pieces that met the evidentiary standard and striking the pieces that didn’t. That’s the amended Rule 702 operating as designed — surgical exclusion rather than wholesale rejection.
BBK Tobacco & Foods, doing business as HBI International, distributes smoking-related products under the RAW brand — rolling papers, tips, trays, and accessories. Central Coast Agriculture (CCA) sells cannabis products under the Raw Garden brand through California-licensed dispensaries. BBK alleged that CCA’s use of “Raw Garden” infringed its “RAW” trademark and sought damages, disgorgement of CCA’s profits, and a permanent injunction requiring CCA to rebrand.
The case had already been to the Ninth Circuit, which reversed an earlier summary judgment in CCA’s favor on the trademark claims and remanded for trial. On remand, the damages question became central: if BBK could prove infringement, how much was it owed? Both sides retained damages experts. Both experts were challenged. The pretrial Daubert ruling shaped what evidence the jury would hear — and, ultimately, what damages theories were available at trial.
The case went to a two-week jury trial in October 2025. After less than ninety minutes of deliberation, the jury returned a unanimous verdict for CCA on all claims, finding no infringement. BBK recovered nothing. But the pretrial Daubert rulings — which determined what the jury would hear if liability was established — are the holdings that matter for damages practitioners.
BBK’s damages expert offered two theories of recovery: disgorgement of CCA’s profits attributable to the infringement and a reasonable royalty for the unauthorized use of the RAW mark. Both theories were partially excluded.
Disgorgement: unsupported assumptions. In a trademark disgorgement case, the plaintiff must first establish the defendant’s gross profits from the infringing activity. The defendant then bears the burden of proving deductible expenses or other elements of cost. The plaintiff’s expert’s disgorgement analysis relied on assumptions the court found lacked adequate factual support under the amended Rule 702. The specific deficiency: the assumptions were not sufficiently tied to the evidentiary record. Broad assumptions about what portion of CCA’s revenue was attributable to the infringing use of “Raw Garden” — rather than to CCA’s product quality, distribution network, or independent brand recognition — were not grounded in evidence the court could credit.
Reasonable royalty: undisclosed license agreement. The plaintiff’s expert’s reasonable royalty analysis relied on a license agreement that had not been timely disclosed in discovery. Under Rule 26, parties must disclose the documents and information they intend to rely on, including documents their experts use as the basis for their opinions. When the license agreement surfaced during the expert’s analysis but had not been produced to the opposing side during fact discovery, the court struck the portion of the expert’s opinion that relied on it. The exclusion wasn’t methodological — reasonable royalty analysis based on comparable licenses is an accepted methodology. The exclusion was evidentiary: you cannot rely on evidence the other side never had the opportunity to examine.
The discovery failure is a cautionary detail for litigation counsel. A damages expert’s analysis is only as admissible as the evidence it rests on. If the expert relies on a document that wasn’t produced in discovery, the expert’s opinion inherits the discovery violation. The methodological soundness of the reasonable royalty approach didn’t save the analysis from the disclosure failure. The tool was right; the evidentiary foundation was missing.
CCA’s damages expert offered two types of analysis: a “but-for” expense methodology (estimating what CCA’s expenses would have been absent the infringement) and an apportionment analysis (estimating what portion of CCA’s profits were attributable to the infringing use of the RAW mark versus other value drivers).
But-for expenses: excluded for insufficient support. The defendant’s expert’s but-for expense analysis was limited because the underlying assumptions lacked adequate evidentiary support. Estimating what a company’s expenses “would have been” in a counterfactual scenario is inherently speculative, and the amended Rule 702 demands that the expert demonstrate to the court that the opinion is based on sufficient facts or data and reliably applies reliable methods. The court found the expert’s but-for expense assumptions didn’t clear that bar.
Apportionment: allowed based on consumer-confusion data. The defendant’s apportionment analysis, by contrast, survived. This analysis used consumer-confusion survey data to estimate what percentage of CCA’s sales were driven by confusion with the RAW mark versus CCA’s own brand equity. Consumer-confusion surveys are an established methodology in trademark litigation — they’re used to prove likelihood of confusion on the liability side and to apportion damages on the remedy side. The court found the expert’s reliance on the survey data was grounded in accepted methodology and supported by the evidence.
The contrast between the two analyses is instructive. The but-for expense methodology was speculative because it asked the court to accept hypothetical expense assumptions without factual grounding. The apportionment analysis was empirical because it was tied to actual survey data measuring actual consumer behavior. The amended Rule 702 rewards the latter and penalizes the former.
What makes BBK distinctive in the expert admissibility pipeline is the partial-exclusion pattern. The court didn’t choose one expert over the other. It didn’t exclude both. It evaluated each component of each expert’s analysis independently and made admissibility decisions at the component level:
Plaintiff’s disgorgement analysis: excluded (unsupported assumptions). Plaintiff’s reasonable royalty analysis: excluded (undisclosed license). Defendant’s but-for expense analysis: excluded (insufficient support). Defendant’s apportionment analysis: allowed (consumer-confusion survey data).
This is the amended Rule 702 operating at its most granular. The 2023 amendment emphasized that courts must evaluate whether the expert’s opinion “reflects a reliable application of the principles and methods to the facts of the case.” That evaluation happens at the opinion level, not the expert level. An expert can have credible credentials, use an accepted methodology, and still produce specific opinions that fail the evidentiary test because the factual foundation for those specific opinions is missing.
For damages experts: prepare for the possibility that the court will keep some of your analysis and strike the rest. Each opinion in your report must independently satisfy Rule 702. A strong apportionment analysis doesn’t save a weak but-for analysis. A sound royalty methodology doesn’t save an opinion built on undisclosed evidence. The court evaluates each piece on its own merits.
The pipeline’s expert admissibility cases now define four points on a spectrum:
Total exclusion — wrong credentials: Sullivan v. Loden. The expert lacked domain-specific qualifications to value closely held businesses for gift-tax purposes. The testimony was excluded entirely. No fallback to lay opinion or hearsay.
Total exclusion — unreliable tool: Matter of Weber. The expert used Copilot to cross-check calculations but couldn’t recall the prompts, identify the sources, or explain the methodology. AI-generated output failed the Frye standard. The testimony was excluded entirely.
Partial exclusion — some components survive: BBK v. Central Coast Agriculture. Both experts had opinions excluded and opinions allowed. The court evaluated each component independently. The apportionment analysis survived because it was grounded in survey data. The but-for expenses, the unsupported disgorgement assumptions, and the analysis built on undisclosed evidence did not.
Full admission — record-anchored methodology: Yador v. Mowatt. The expert’s comparable company selection survived the cherry-picking attack because every assumption was tied to deposition testimony, primary-source comparable data, and the subject company’s financials. Challenges to the expert’s judgment went to weight, not admissibility.
The pattern: the amended Rule 702 rewards transparency, evidentiary grounding, and component-level defensibility. It penalizes opacity, speculation, and reliance on evidence the other side hasn’t seen. Experts who can defend each piece of their analysis independently survive. Experts whose analysis depends on assumptions the court can’t verify — whether because the tool is opaque (Weber), the evidence is undisclosed (BBK), or the credentials are wrong (Sullivan) — lose the specific opinions that fail, and sometimes lose the testimony entirely.
For damages experts and litigation counsel preparing trademark damages analyses after BBK:
Verify that every document the expert relies on has been produced in discovery. The license agreement exclusion in BBK was a discovery failure, not a methodology failure. Before the expert finalizes the report, cross-check every cited document against the discovery production log. If the expert needs a document that hasn’t been produced, supplement the disclosures before the report is served — not after the Daubert motion is filed.
Ground every assumption in the evidentiary record. Disgorgement requires connecting the defendant’s profits to the infringing activity. Reasonable royalty requires comparable licenses. Apportionment requires evidence of what drove the defendant’s sales. Each assumption should cite a specific piece of evidence — a deposition transcript, a financial document, a survey result — that the court can independently evaluate. Broad assumptions without factual anchors are the assumptions that get struck.
Use empirical data for apportionment. The apportionment analysis that survived in BBK was grounded in consumer-confusion survey data. Surveys are expensive to commission, but they produce the empirical foundation the court demands. An apportionment analysis based on the expert’s “professional judgment” about what percentage of sales were attributable to the mark — without survey data or other empirical support — is vulnerable under the amended Rule 702.
Prepare each opinion to survive independently. If you’re presenting multiple damages theories (disgorgement, reasonable royalty, lost profits), each theory must independently satisfy Rule 702. A strong theory doesn’t rehabilitate a weak one. The court in BBK evaluated the plaintiff’s disgorgement and royalty analyses separately and reached different results on each. Build each theory to stand on its own.
There’s an underappreciated strategic dimension to partial exclusion. When a court excludes an expert entirely (Sullivan, Weber), the party can argue that the exclusion was error and seek reversal on appeal. The record is clean: the expert was in or out. When a court partially excludes an expert (BBK), the party goes to trial with a damages theory that’s been surgically reduced. The surviving portions may not tell a complete story. The excluded portions leave gaps the jury never hears about. And the partial exclusion is harder to challenge on appeal because the court exercised its gatekeeping function with precision — it didn’t exclude the expert; it excluded specific unsupported opinions.
For litigation counsel: if you anticipate a Daubert challenge, evaluate your expert’s report for the weakest component. That component is the one the court will strike. If its removal leaves the remaining analysis incomplete or incoherent, strengthen it before the motion is filed. If the weakest component is the one that carries the largest dollar value, the partial exclusion may be more damaging to your case than total exclusion would be — because you lose the biggest piece and keep the smaller ones, and the jury sees a truncated damages theory that looks unpersuasive precisely because it’s missing its anchor.
BBK v. Central Coast Agriculture is the amended Rule 702 at its sharpest: component-by-component evaluation of competing damages experts, with the court keeping what’s supported and striking what isn’t. The plaintiff’s expert lost the disgorgement analysis (unsupported assumptions) and the reasonable royalty analysis (undisclosed license agreement). The defendant’s expert lost the but-for expense methodology (insufficient support) but kept the apportionment analysis (consumer-confusion survey data). The jury ultimately found no infringement and the damages question was moot. But the pretrial rulings define the standard every trademark damages expert will be measured against: each opinion must independently satisfy Rule 702, each assumption must be grounded in the evidentiary record, and each document the expert relies on must have been produced in discovery. Methodology matters, but the evidentiary foundation matters more.
If you’re preparing a damages analysis in a trademark infringement case and want to make sure each component of the analysis will survive a Rule 702 challenge, happy to discuss the approach. The evidentiary audit of the expert report — checking every assumption against the record and every document against the discovery log — is the most cost-effective pre-trial investment there is.
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