  United States Court of Appeals
      for the Federal Circuit
                ______________________

        DYNAMIC 3D GEOSOLUTIONS LLC,
               Plaintiff-Appellant

  ACACIA RESEARCH CORPORATION, ACACIA
          RESEARCH GROUP LLC,
            Nonparties-Appellants

                           v.

 SCHLUMBERGER LIMITED (SCHLUMBERGER
     N.V.), SCHLUMBERGER HOLDINGS
CORPORATION, SCHLUMBERGER TECHNOLOGY
               CORPORATION,
              Defendants-Appellees
             ______________________

                 2015-1628, 2015-1629
                ______________________

   Appeals from the United States District Court for the
Western District of Texas in No. 1:14-cv-00112-LY, Judge
Lee Yeakel.
                 ______________________

              Decided: September 12, 2016
                ______________________

    MICHAEL JAMES COLLINS, Collins, Edmonds, Pogor-
zelski, Schlather & Tower PLLC, Houston, TX, argued for
plaintiff-appellant. Also represented by JOHN J. EDMONDS,
SHEA NEAL PALAVAN.
2        DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.



   STEVEN MARK HANLE, Stradling Yocca Carlson &
Rauth, P.C., Newport Beach, CA, argued for nonparties-
appellants. Also represented by MARC J. SCHNEIDER,
TRAVIS PHILLIP BRENNAN.

    MAXIMILIAN A. GRANT, Latham & Watkins LLP,
Washington, DC, argued for defendants-appellees. Also
represented by GABRIEL BELL, THOMAS J. HUMPHREY;
TERRENCE J. CONNOLLY, New York, NY; ANN MARIE
WAHLS, Chicago, IL.
                ______________________

    Before LOURIE, WALLACH, and HUGHES, Circuit Judges.
     Opinion for the court filed by Circuit Judge LOURIE.
     Concurring opinion filed by Circuit Judge WALLACH.
LOURIE, Circuit Judge.
    Dynamic 3D Geosolutions LLC (“Dynamic 3D”), along
with Acacia Research Corporation and Acacia Research
Group LLC (collectively, “Acacia”), appeal from the deci-
sion of the United States District Court for the Western
District of Texas disqualifying counsel and dismissing its
patent infringement complaint without prejudice. Dy-
namic 3D Geosolutions LLC v. Schlumberger Ltd., No. A-
14-CV-112-LY, 2015 WL 4578681 (W.D. Tex. Mar. 31,
2015) (“Order”). Because the district court did not err in
disqualifying Dynamic 3D’s counsel and in dismissing the
complaint, we affirm.
                        BACKGROUND
    In 2006, Schlumberger hired Charlotte Rutherford in
a senior counsel position as Manager of Intellectual
Property Enforcement, in licensing and litigation; pro-
moted her to Director of Intellectual Property in 2009;
and then promoted her again to Deputy General Counsel
for Intellectual Property. Her job duties included “devel-
oping and implementing the worldwide IP strategy,”
DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.       3



“protecting and preserving [Schlumberger’s] IP assets
including patents, trademarks and trade secrets,” and
“advis[ing] senior [Schlumberger] executives regarding
risk issues relating to IP.” Joint App. (“J.A.”) 958. She
was also responsible for the company’s worldwide pro-
gram for enforcing intellectual property, including litiga-
tion, and directed and supervised outside counsel on
intellectual property legal matters. Id.
     As part of her work at Schlumberger, Rutherford
managed a copyright lawsuit involving Petrel, Schlum-
berger’s software platform for three-dimensional visuali-
zation, mapping, and reservoir modeling of oil wells. She
was also involved in a “Goldstar” project that evaluated
further patentable aspects of Petrel and assessed the risk
of lawsuits against it. One competitor’s product analyzed
during this project was Austin Geomodeling’s RECON
software. Austin Geomodeling filed a patent application
in 2007 that eventually issued as U.S. Patent 7,986,319
(“the ’319 patent”) in 2011. RECON is supposedly the
commercial embodiment of the ’319 patent, which is
directed to systems and methods of combining seismic and
well log data into a real-time, interactive three-
dimensional display.
    In mid-2013, after seven years at Schlumberger,
Rutherford left Schlumberger and soon thereafter began
working as Senior Vice President and Associate General
Counsel at Acacia Research Group LLC. Acacia Research
Group LLC is a wholly-owned subsidiary of Acacia Re-
search Corporation, the parent company of various pa-
tent-holding entities, including Dynamic 3D.
    Shortly after joining Acacia, Rutherford twice met
with the inventors of the ’319 patent to discuss Acacia’s
acquisition of the patent and possible future litigation.
J.A. 755–56, 760, 762. She also participated in a tele-
phone call with the law firm of Collins, Edmonds, Pogor-
zelski, Schlather & Tower PLLC (“CEP“) and one of her
4      DYNAMIC 3D GEOSOLUTIONS LLC    v. SCHLUMBERGER LTD.



subordinates, Gary Fischman, regarding the ’319 patent.
J.A. 765. Schlumberger’s Petrel product was discussed as
a potential target of patent infringement litigation, at the
meetings and in the call. See, e.g., J.A. 759–761, 764, 766,
828–829, 831. Fischman and CEP then prepared a rec-
ommendation to Acacia’s CEO to acquire the ’319 patent
and to sue Schlumberger and others, and Rutherford
“approved” or “concurred” in that recommendation. J.A.
769–71, 774–77. Rutherford and Fischman also jointly
made the decision to hire CEP as outside counsel. J.A.
784–85. Acacia subsequently retained CEP for all ’319
patent-related litigation and acquired the patent. Dy-
namic 3D was formed as a wholly-owned subsidiary of
Acacia, and days later was assigned the ’319 patent on
December 9, 2013. Order at *1. Dynamic 3D, at least as
of May 2014, had no employees.
    In February 2014, Dynamic 3D filed several lawsuits,
including one asserting that Schlumberger, in its use and
sale of Petrel, infringed the ’319 patent. The complaint
alleges actual knowledge of the ’319 patent by Schlum-
berger as early as the issuance of the patent in July 2011.
The district court stayed the case except for limited claim
construction discovery. Schlumberger raised Rutherford’s
potential conflict of interest to the court in April 2014.
After a stay was lifted in August, Schlumberger filed a
motion to disqualify Dynamic 3D’s counsel. The district
court granted Schlumberger’s motion, disqualifying
Rutherford, other in-house counsel for Acacia Research
Corporation and its subsidiaries, and the CEP firm from
representing Dynamic 3D in the instant case.
     Relatedly, Schlumberger sued Rutherford in Texas
state court in March 2014, presenting evidence that she
retained copies of confidential and privileged information,
including that relating to Petrel, for purposes of providing
it to Acacia. The court dismissed all but the breach-of-
contract claim for violating her confidentiality agreement,
finding that the Texas anti-SLAPP statute protected
DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.        5



Rutherford’s First Amendment rights to petition and
association, viz., her “communication” of a “concurrence
with the recommendation by outside counsel and in-house
counsel to acquire the [’]319 patent and to sue Schlum-
berger.” J.A. 825, 828. The court sanctioned Schlum-
berger for bringing the suit, ordering payment of $600,000
in attorneys’ fees and sanctions. Schlumberger chal-
lenged the decision to dismiss almost all of the claims, but
the state appellate court dismissed that appeal for lack of
jurisdiction over an interlocutory appeal. These issues are
not before us in this appeal.
    The district court in this case first found that Ruther-
ford’s work at Schlumberger was substantially related to
her current work at Acacia. The court found that because
the accused features of Petrel existed in the older versions
that Rutherford was exposed to, and because she was
involved at Schlumberger in efforts to license Petrel to
other companies, the evidence created an irrebuttable
presumption that she acquired confidential information
requiring her disqualification. Order at *5.
    The district court then determined that the acquired
knowledge should be imputed to all Acacia attorneys for
purposes of participating in Dynamic 3D’s suit against
Schlumberger. The court noted that conflict rules for
“firms” also apply to corporate legal departments, and
that Dynamic 3D depended entirely on Acacia’s legal
department for its strategy and litigation conduct. Order
at *5–6. The court was persuaded by evidence of Ruther-
ford’s involvement in acquiring the ’319 patent, in decid-
ing to sue Schlumberger, and in retaining CEP. Order at
*6. The court found that Dynamic 3D failed to rebut the
presumption of disclosure of Schlumberger’s confidential
information, and thus disqualified in-house counsel for
Acacia Research Corporation and its subsidiaries. Id.
    The district court lastly extended the disqualification
to CEP, interpreting Fifth Circuit case law on disqualify-
6      DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.



ing co-counsel as shifting the evidentiary burden to Dy-
namic 3D to prove non-disclosure after Schlumberger met
its burden to create a rebuttable presumption of disclo-
sure. Order at *7. The court found that the evidence
showed multiple communications among Rutherford,
Fischman, and CEP while preparing to file suit against
Schlumberger. Id. As Fischman continued to not only
actively work with CEP in this case but also communicate
information regarding the litigation to Rutherford, the
court also disqualified CEP. Id.
    Consequently, because the pleadings were drafted by
counsel presumed to possess Schlumberger’s confidential
information, the district court dismissed all of Dynamic
3D’s claims against Schlumberger without prejudice. Id.
     Dynamic 3D and Acacia timely appealed from the dis-
trict court’s decision to this court. Shortly before the
scheduled oral argument on August 3, 2016, Dynamic 3D
and Acacia submitted a motion to dismiss the appeal,
asserting that the case had been settled. Dynamic 3D
Geosolutions, LLC v. Schlumberger Ltd., No. 2015-1628,
ECF No. 76 (Fed. Cir. Aug. 1, 2016). Schlumberger,
however, opposed the motion. Id., ECF No. 77. Acacia
subsequently submitted the supposed settlement agree-
ment to us under seal. The agreement appears to consist
of hastily handwritten notes on two sheets of notebook
paper along with a typed cover sheet containing minimal
clarifying language and a signature page dated June 17,
2016. Id., ECF No. 84 (Fed. Cir. Aug. 4, 2016). Although
a settlement need not be effectuated by a formal docu-
ment, upon review of the submission, we agree with
Schlumberger that the appeal was not concluded by the
agreement as submitted to this court and, based on the
status of the appeal as of the date of oral argument,
decline to terminate the appeal under Federal Rule of
Appellate Procedure 42(b). We have jurisdiction over this
appeal pursuant to 28 U.S.C. § 1295(a)(1).
DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.         7



                        DISCUSSION
    We review a district court’s disqualification and dis-
missal order under the law of the regional circuit in which
the district court sits, here, the Fifth Circuit. Atasi Corp.
v. Seagate Tech., 847 F.2d 826, 829 (Fed. Cir. 1988).
Because motions to disqualify counsel “are substantive
motions affecting the rights of the parties,” we apply
standards developed under federal law. In re Dresser
Indus., Inc., 972 F.2d 540, 543 (5th Cir. 1992); see also In
re Am. Airlines, Inc., 972 F.2d 605, 609 (5th Cir. 1992)
(“Federal courts may adopt state or ABA rules as their
ethical standards, but whether and how these rules are to
be applied are questions of federal law.”). Applying the
law of the Fifth Circuit, the standard of review is for
abuse of discretion, with the underlying factual findings
reviewed for clear error and the interpretation of the
relevant rules of attorney conduct reviewed de novo.
F.D.I.C. v. U.S. Fire Ins., 50 F.3d 1304, 1311 (5th Cir.
1995); In re Am. Airlines, 972 F.2d at 609. We also review
the grant of a motion to dismiss without prejudice for
abuse of discretion. See United States ex rel. Holmes v.
Northrop Grumman Corp., 642 F. App’x 373 (5th Cir.
2016) (noting that “abuse of discretion standard applies in
[an appellate court’s] review of a district court’s dismissal
of a complaint as a result of ethical violations”); cf. Marts
v. Hines, 117 F.3d 1504, 1506 (5th Cir. 1997) (en banc)
(noting that “trial court’s exercise of discretion” for dis-
missal without prejudice would be focus of appellate
review).
    Three applicable sets of rules govern the grant of the
motion to disqualify counsel in this case: (1) the ABA
Model Rules of Professional Conduct, the legal profes-
sion’s national ethical rules; (2) the Texas Disciplinary
Rules of Professional Conduct, the state-specific adapta-
tion of the ABA Model Rules; and (3) the Local Rules for
the Western District of Texas, which adopt the Texas
Disciplinary Rules. See, e.g., In re ProEducation Int’l,
8      DYNAMIC 3D GEOSOLUTIONS LLC     v. SCHLUMBERGER LTD.



Inc., 587 F.3d 296, 299 (5th Cir. 2009); Nat’l Oilwell Varco
LP v. Omron Oilfield & Marine, Inc., 60 F. Supp. 3d 751,
758 (W.D. Tex. 2014).
             I. Disqualification of Counsel
         A. The Disqualification of Rutherford
    Texas Disciplinary Rule 1.09(a) provides that:
    (a) Without prior consent, a lawyer who personal-
       ly has formerly represented a client in a matter
       shall not thereafter represent another person in
       a matter adverse to the former client:
      ...
      (2) if the representation in reasonable probabil-
         ity will involve a violation of [the rule regard-
         ing Confidentiality of Information]; or
      (3) if it is the same or a substantially related
         matter.
Tex. Disciplinary Rules of Prof’l Conduct (“Texas Discipli-
nary Rules”) r. 1.09 (emphases added).
    Comment 4 to Rule 1.09 notes that representation
would be improper “if there were a reasonable probability
that the subsequent representation would involve either
an unauthorized disclosure of confidential information . . .
or an improper use of such information to the disad-
vantage of the former client,” and that “[w]hether such a
reasonable probability exists in any given case will be a
question of fact.” Id. cmt. 4.
    Comment 4B further elaborates that “‘substantially
related’ primarily involves situations where a lawyer
could have acquired confidential information concerning a
prior client that could be used either to that prior client’s
disadvantage or for the advantage of the lawyer’s current
client or some other person.” Id. cmt. 4B; cf. In re Am.
Airlines, 972 F.2d at 618–19 (noting that an attorney’s
DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.        9



representation “does not need to be ‘relevant’ in the
evidentiary sense to be ‘substantially related,’” but rather
“need only be akin to the present action in a way reasona-
ble persons would understand as important to the issues
involved” (quoting In re Corrugated Container Antitrust
Litig., 659 F.2d 1341, 1346 (5th Cir. 1981))).
     The corresponding ABA Model Rule similarly prohib-
its representation that presents a conflict of interest with
a former client:
   (a) A lawyer who has formerly represented a cli-
      ent in a matter shall not thereafter represent
      another person in the same or a substantially
      related matter in which that person’s interests
      are materially adverse to the interests of the
      former client . . . .
   ...
   (c) A lawyer who has formerly represented a client
      in a matter or whose present or former firm has
      formerly represented a client in a matter shall
      not thereafter:
      (1) use information relating to the representa-
         tion to the disadvantage of the former client
         ....
Model Rules of Prof’l Conduct (“ABA Model Rules”) r. 1.9
(Am. Bar Ass’n 1983) (emphasis added).
    Dynamic 3D argues that the district court clearly
erred in finding that Rutherford’s former representation
was substantially related to her alleged representation in
this case. Dynamic 3D characterizes her involvement in
the acquisition of the ’319 patent and enforcement against
other parties as “limited,” and denies any such involve-
ment in the instant suit against Schlumberger. Dynamic
3D asserts that the court based its finding on descriptions
of privileged documents rather than on a review of the
10     DYNAMIC 3D GEOSOLUTIONS LLC    v. SCHLUMBERGER LTD.



actual documents, and ignored Rutherford’s testimony
that she was not directly involved in the Goldstar pro-
jects. Thus, Dynamic 3D contends, the court failed to
fully analyze the facts or properly apply Fifth Circuit
precedent. Dynamic 3D lastly argues that Schlumberger
failed to establish that Rutherford played anything be-
yond a limited supervisory role, with some general expo-
sure to earlier versions of Petrel in the copyright lawsuit.
     Schlumberger responds that Fifth Circuit precedent
imposes an irrebuttable presumption that relevant confi-
dential information was acquired once prior and present
representations are shown to have been substantially
related. Schlumberger argues that the district court’s
factual finding that Rutherford’s prior work is substan-
tially related to this suit is based on Rutherford’s personal
representation of Schlumberger in litigation and licensing
matters, including leading a team that evaluated intellec-
tual property rights and risks relating to Petrel. Moreo-
ver, Schlumberger counters, the court correctly declined
to credit self-serving testimony in light of the contrary
evidence presented. Schlumberger notes that Rutherford
admitted that she acted in a legal capacity for Acacia at
the initial meetings concerning the ’319 patent, and that
the assessment of Petrel as being a possible litigation
target was clearly related to her prior work. Schlumberg-
er further points out that Rutherford would have had
access to material sensitive information even in her more
remote supervisory role during her previous employment.
    We agree with Schlumberger that the district court
did not clearly err in finding that Rutherford’s work for
Schlumberger, and for Acacia and Dynamic 3D, were
substantially related. Rutherford occupied senior counsel,
director, and deputy general counsel positions in a large
company’s intellectual property department. The record
documents her involvement at Schlumberger in a project
specifically evaluating a product later accused of in-
fringement by Acacia, and the risks of such an infringe-
DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.        11



ment suit. Rutherford’s representation at Schlumberger
included efforts to license Petrel when the later-accused
features of the product existed in the older versions with
which Rutherford was involved. We will therefore not
disturb the district court’s finding that Rutherford’s
employment with Schlumberger was more than tangen-
tially related to the issues in the present suit.
     We recognize that there are important societal rights
implicated by attorney disqualification, such as the right
of a party to counsel of its choice and an attorney’s right
to freely practice his or her profession. However, there is
an overriding countervailing concern suffusing the ethical
rules: a client’s entitlement to an attorney’s adherence to
her duty of loyalty, encompassing a duty of confidentiali-
ty. See In re Am. Airlines, 972 F.2d at 616–20; Texas
Disciplinary Rules r. 1.06 cmts. 1, 2; ABA Model Rules
r. 1.9 cmts. 4, 7; see also Brennan’s Inc. v. Brennan’s
Restaurants, Inc., 590 F.2d 168, 172 (5th Cir. 1979) (“The
obligation of an attorney not to misuse information ac-
quired in the course of representation serves to vindicate
the trust and reliance that clients place in their attorneys.
A client would feel wronged if an opponent prevailed
against him with the aid of an attorney who formerly
represented the clients in the same matter. . . . [T]his
would undermine public confidence in the legal system as
a means for adjudicating disputes.”). Accordingly, the
obligation to protect a client’s confidential information
exists as part of the larger duty of loyalty owed to clients
to maintain the integrity of the attorney–client relation-
ship.
    Rutherford herself admitted attending, as legal coun-
sel for Acacia, meetings with the inventors of the ’319
patent, other in-house counsel, and outside counsel re-
garding the acquisition of the ’319 patent, and admitted
that Schlumberger’s Petrel product was a topic of discus-
sion at those meetings. Her admitted “communication,”
particularly the “concurrence with the recommendation
12     DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.



by outside counsel and in-house counsel to acquire the
[’]319 patent and to sue Schlumberger,” J.A. 825–28,
would have entailed assessing the patent’s value as a
litigation tool against Schlumberger with knowledge of
her former employer’s confidential information. See also
J.A. 3648, 3651–57 (privilege logs from Dynamic 3D and
Acacia describing litigation-related communications that
involved Rutherford). Even if we were to reweigh the
evidence, which in our role as an appellate court would be
inappropriate, Dynamic 3D’s arguments that Rutherford
was not involved in the current suit are thus way wide of
the mark. Acacia itself admitted that it failed to screen
her from the case, Oral Arg. at 4:48–5:30, and both Dy-
namic 3D and Acacia provided privilege logs evincing
Rutherford’s involvement in the present suit, J.A. 3648,
3651–52. Rutherford is therefore irrebuttably presumed
to have possessed Schlumberger’s relevant confidential
information and was properly found to have been disqual-
ified.
    The district court affirmed the sound principle of not
suborning the disloyalty of attorneys. It was inappropri-
ate to hire a senior attorney, one intimately knowledgea-
ble concerning a particular product, its competitors, and
its associated business strategies and intellectual proper-
ty, into a position in which she not only participated in
but in fact played a significant role in acquiring a patent
used to accuse her former employer’s product of patent
infringement.
  B. The Disqualification of Other In-House Counsel
    Texas Disciplinary Rule 1.09(b) provides that “when
lawyers are or have become members of or associated
with a firm, none of them shall knowingly represent a
client if any one of them practicing alone would be prohib-
ited from doing so by paragraph (a).” Texas Disciplinary
Rules r. 1.09(b). Comment 5 explains that this paragraph
“extends paragraph (a)’s limitations on an individual
DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.        13



lawyer’s freedom to undertake a representation against
that lawyer’s former client to all other lawyers who are or
become members of or associated with the firm in which
that lawyer is practicing.” Id. cmt. 5. The comment
exemplifies the imputation rule as: “[I]f a lawyer severs
his or her association with a firm and that firm retains as
a client a person whom the lawyer personally represented
while with the firm, that lawyer’s ability thereafter to
undertake a representation against that client is gov-
erned by paragraph (a); and all other lawyers who are or
become members of or associates with that lawyer’s new
firm are treated in the same manner by paragraph (b).”
Id. (emphasis added).
    The corresponding ABA Model Rule similarly extends
the prohibition to members of a lawyer’s new “firm”:
   (a) While lawyers are associated in a firm, none of
      them shall knowingly represent a client when
      any one of them practicing alone would be pro-
      hibited from doing so by Rules 1.7 or 1.9, unless
      ...
       (2) the prohibition is based upon Rule
       1.9(a) or (b) and arises out of the disquali-
       fied lawyer’s association with a prior firm,
       and
           (i) the disqualified lawyer is timely
           screened from any participation in the
           matter . . . ; [and]
           (ii) written notice is promptly given to
           any affected former client . . . .
ABA Model Rules r. 1.10. Comment 2 emphasizes that
each lawyer at a “firm” is “vicariously bound by the obli-
gation of loyalty.” Id. cmt. 2.
    Dynamic 3D argues that any presumption of disclo-
sure to Acacia’s other in-house attorneys is questionable
14     DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.



under Fifth Circuit law. If it exists, Dynamic 3D con-
tends, that presumption was rebutted by uncontroverted
evidence that there was no actual disclosure of confiden-
tial information from Rutherford to other Acacia attor-
neys. Dynamic 3D notes that Rutherford, Fischman, and
Acacia’s CEO all testified that Rutherford’s involvement
with the patent at Acacia was very limited, and unrelated
to Schlumberger. Dynamic 3D also faults the district
court for failing to balance the parties’ interests as Dy-
namic 3D contends is required under Fifth Circuit law; no
specific harm to Schlumberger was ever identified, com-
pared with the time and resources spent by Dynamic 3D
on preparing for and prosecuting this case.
    Acacia similarly argues that Fifth Circuit law does
not require a presumption of disclosure for in-house
attorneys because that presumption should only be
grounded in the duty of loyalty resulting from personal
representation.    Because none of Acacia’s “licensing
executives” have worked for Schlumberger and thus
evidence no appearance of disloyalty, Acacia contends,
there is no rationale for a presumption, and thus imputa-
tion should be analyzed as for co-counsel, i.e., requiring
actual disclosure. Acacia also asserts that the court’s
factually unsupported findings contradict sworn state-
ments and corroborating evidence that Rutherford did not
actually disclose Schlumberger’s confidential information.
Acacia further faults the court for shifting the burden of
persuasion to Acacia. According to Acacia, Schlumberger
never proved that Rutherford acquired confidential in-
formation; she was only presumed to have it. Moreover,
Acacia argues, the disqualification unduly burdens its
right to counsel; specifically, the decision effectively
enjoins Acacia from ever asserting the patent against
Schlumberger.
    Schlumberger responds that under Fifth Circuit law
on imputation to other in-house counsel, the analysis
turns on whether the conflicted attorney’s representation
DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.        15



is personal. Schlumberger notes that the district court
found that, rebuttable or not, Dynamic 3D failed to rebut
the presumption of disclosure with any evidence that
Acacia screened Rutherford from work she performed at
Schlumberger with others by instructing her not to work
on related matters. Schlumberger additionally responds
that Texas law does not require actual disclosure, only a
genuine threat of disclosure.       Schlumberger further
argues that Rutherford’s prior work made her privy to
information relating to her later actions for Acacia, and
thus her communications—in the form of approvals and
concurrence with recommendations—tacitly disclosed her
belief, based on Schlumberger’s confidential information,
that Dynamic 3D’s claims had merit and that Schlum-
berger’s defenses, including invalidity, were meritless.
    Schlumberger also contends that a balancing of inter-
ests is not required when imputing a conflict to other in-
house counsel. Even if the court were to explicitly balance
the parties’ interests, Schlumberger argues that the
prejudice to Schlumberger greatly outweighs the harm
that Dynamic 3D inflicted on itself. The potential source
of the conflict of interest was flagged early on in the case,
but Acacia’s attorneys continued to work on the suit and
delayed the filing of Schlumberger’s disqualification
motion by opposing lifting the stay.
     We agree with the district court that regardless
whether the presumption was irrebuttable or rebuttable,
there was a presumption that was not rebutted. Dynamic
3D and Acacia failed to show that knowledge of Schlum-
berger’s confidential information should not be imputed to
Acacia’s other in-house counsel. The ethical standards
are clear that lawyers similarly associated have had
conflicts imputed to them. See Texas Disciplinary Rules
r. 1.10; ABA Model Rules r. 1.9(b). Although the Fifth
Circuit does not subscribe to the “taint” theory for imput-
ing conflicts, it focuses on remaining “sensitive to prevent-
ing conflicts of interest” and “rigorously appl[ies] the
16     DYNAMIC 3D GEOSOLUTIONS LLC    v. SCHLUMBERGER LTD.



relevant ethical standards.” See In re Am. Airlines, 972
F.2d at 611. Acacia admitted at oral argument that there
was no ethical screening wall or other objective measures
implemented to prevent confidential information from
being used, to disadvantage Schlumberger. Here, there
was a clear conflict of interest for Rutherford, and the
principles underlying the ethical standards mandate
extending the disqualification to Acacia’s other in-house
attorneys.
    Even without imputation, Fischman himself reported
solely to Rutherford until after the potential conflict was
raised to the court. In fact, all four Acacia employees in
the Energy Group in Acacia’s Houston office reported to
Rutherford. In attending meetings and making decisions
such as retaining CEP as outside counsel, Rutherford
communicated to the other in-house counsel that she
supported the litigation strategy and thereby disclosed
confidential information to the other Acacia attorneys.
     Moreover, we disagree with Dynamic 3D and Acacia
that a balancing test is required under Fifth Circuit law.
Although some situations present facts in which an anal-
ysis balances the competing interests of the parties in
order to determine whether disqualification would be too
harsh a remedy, those situations are inherently fact-
specific or presented in different procedural postures, e.g.,
in a petition for a writ of mandamus. Even so, we find no
error when the case was barely litigated before Dynamic
3D was on notice that Schlumberger identified the con-
flict. The complaint was filed in February; the case was
stayed from April to August; the potential issue was
brought to the court’s attention in April during the stay;
and the motion was filed days after the stay was lifted in
August. Dynamic 3D and Rutherford should have known
that their actions were inappropriate.
DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.     17



           C. The Disqualification of CEP
    Dynamic 3D lastly disputes the “double imputation” of
the conflict of interest to CEP on the ground that only
actual disclosure warrants the disqualification of outside
counsel under Fifth Circuit law. Dynamic 3D argues that
Rutherford is only presumed to have acquired relevant
confidential information, and that there is no record
evidence of any disclosure of such information to CEP or
any substantive communications between Rutherford and
CEP. Dynamic 3D faults the district court for failing to
identify any specific disclosures actually made, and for
ignoring Dynamic 3D’s rebuttal evidence showing the
absence of disclosures to CEP. Dynamic 3D further
asserts that the decision to sue Schlumberger was made
by Acacia’s CEO alone, and that Rutherford’s concurrence
with that decision was not a communication substantive
enough to constitute actual disclosure of confidential
information. Dynamic 3D thus contends that the district
court erred because Fifth Circuit law does not provide for
a presumption of disclosure to co-counsel if there is no
attorney–client relationship.
    Schlumberger responds that the evidence supports
the district court’s findings of substantive contacts and
communications among Rutherford, Fischman, and CEP,
which created a rebuttable presumption of disclosure. No
such rebuttal was found by the court. Schlumberger
contends that under the Texas Supreme Court’s interpre-
tation of the Texas Disciplinary Rules, once Schlumberger
showed sufficient contact or communication between
Rutherford and CEP, the burden shifted to Dynamic 3D to
show that there was no reasonable prospect that confiden-
tial information was disclosed, and no actual disclosure.
Schlumberger further responds that even without a
presumption of disclosure, there was actual disclosure to
CEP by Rutherford’s concurring in various recommenda-
tions. Given her knowledge of Petrel, Schlumberger
asserts, her opinion carried weight and was not merely “a
18      DYNAMIC 3D GEOSOLUTIONS LLC    v. SCHLUMBERGER LTD.



wink and a nod” to encourage Acacia’s business and
litigation decisions. See S.E.C. v. Rocklage, 470 F.3d 1
(1st Cir. 2006) (finding that “a wink and a nod” communi-
cated confidential information constituting unlawful
tipping).
    We thus agree that the district court did not err in
concluding that the disqualification should extend to CEP.
Even beyond presumptions, there was sufficient evidence
of Rutherford’s involvement in the selection of CEP as
outside counsel and in the litigation against Schlumberg-
er to support a finding of communication by conduct.
    Dynamic 3D and Acacia’s arguments focus on pre-
sumptions and actual disclosure, ignoring the totality of
the duty owed to clients. Here, Rutherford disregarded
the duty of loyalty and communicated confidential infor-
mation not only to other in-house counsel but also to
outside counsel, and thus the district court did not clearly
err in imputing the conflict of interest to outside counsel
as well as to in-house counsel.
     We accordingly find no error in the district court’s
conclusion that Rutherford, Acacia’s other in-house coun-
sel, and CEP were properly disqualified from representing
Dynamic 3D in this case.
            II. Dismissal Without Prejudice
    Dynamic 3D argues that the district court lacked the
legal authority to dismiss its case as a result of disqualify-
ing its counsel. Dynamic 3D faults the district court for
not specifying what “significant prejudice” to Schlumberg-
er justified dismissal. Moreover, Dynamic 3D asserts,
there was no record evidence of any actual disclosure and
thus the case could not have been “tainted” from Ruther-
ford’s supposed breaches of confidence. The dismissal,
Dynamic 3D avers, was overly harsh and constituted an
abuse of discretion for not instead granting the company
time to retain new counsel. Dynamic 3D distinguishes
DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.        19



other cases that have been dismissed as a result of dis-
qualified counsel as grounded in facts that the disquali-
fied attorney was acting in some capacity as a party or
that disclosure was clearly and specifically proven.
     Schlumberger responds that the Fifth Circuit previ-
ously affirmed a district court’s decision to dismiss a case
without prejudice after disqualifying an attorney based on
an irrebuttable presumption of using confidential infor-
mation to a former client’s disadvantage. In support of
the district court’s decision, Schlumberger cites various
cases in the Second Circuit and one in the Western Dis-
trict of Louisiana that were similarly dismissed without
prejudice based on the disqualification of counsel.
     Based on the facts of this case, we find that the dis-
trict court in its abbreviated analysis on this point did not
abuse its discretion in dismissing all pleaded claims
without prejudice. The court did not err in finding that
Dynamic 3D’s pleadings were drafted by lawyers pre-
sumed to possess Schlumberger’s confidential information
and that the significant prejudice that Schlumberger
would face, if the case were to continue, outweighed the
harsh result of dismissal. We do not dispute the court’s
conclusion. All aspects of the case were contaminated by
Rutherford’s actions, from the purchase of the ’319 patent,
to preparation for suit against Schlumberger, to the
actual filing of the suit.
    The district court’s decision is not without precedent
In Doe v. A Corp., the Fifth Circuit affirmed a district
court’s decision disqualifying counsel and dismissing part
of the case without prejudice. 709 F.2d 1043, 1045, 1050–
51 (5th Cir. 1983). Some district courts have granted a
period of time for a party to retain new counsel after
disqualification, which appears to be typically 45 days.
See, e.g., McIntosh v. State Farm Fire & Cas. Co.,
No. 1:06-cv-1080, 2008 WL 941640, at *2 (S.D. Miss. Apr.
4, 2008) (granting 45 days to retain new counsel after
20     DYNAMIC 3D GEOSOLUTIONS LLC    v. SCHLUMBERGER LTD.



attorney disqualification, after which failure to do so or to
proceed pro se would make case “eligible for dismissal
without prejudice”); see also Sumpter v. Hungerford,
No. 12-717, 2013 WL 2181296, at *11 (E.D. La. May 20,
2013) (ordering new counsel within 45 days after attorney
disqualification).    Others, however, have found that
continuing a case after disqualification without dismissal
would greatly prejudice a party because “the case would
be tried on a record developed primarily through the
fruits of [the disqualified attorney]’s unethical labor.”
United States ex rel. Holmes v. Northrop Grumman Corp.,
No. 1:13-cv-85, 2015 WL 3504525 (S.D. Miss., June 3,
2015), aff’d, 642 F. App’x 373, 378 (5th Cir. 2016).
     Dynamic 3D itself admits that, because of the disqual-
ification of its attorneys, it would have to hire a new
employee to manage the re-filing of the complaint, and
retain new outside counsel. Dynamic 3D Br. 42–43. Not
only would those actions likely take more than 45 days
and effectively impact the district court’s docket, but also
the potential for prejudice would continue from the im-
proper use of Schlumberger’s confidential information in
preparing the original pleadings. Based on the district
court’s reasoning, forcing Dynamic 3D to break new
ground with a fresh complaint and clean docket rather
than to continue drawing from a poisoned well was not an
abuse of discretion.
    We also note that Dynamic 3D did not expressly re-
quest leave to amend its pleadings or substitute counsel,
see J.A. 1317–18; even if it had, the district court would
have had the discretion to deny that request, see
Whitmore v. Victus, Ltd., 212 F.3d 885, 887 (5th Cir.
2000). See also United States ex rel. Willard v. Humana
Health Plan of Tex., Inc., 336 F.3d 375, 387 (5th Cir. 2003)
(finding no abuse of discretion in denying leave to amend
when not expressly requested from district court).
DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.       21



    We therefore conclude that the district court did not
abuse its discretion in dismissing all of the pleaded claims
in Dynamic 3D’s complaint without prejudice.
                       CONCLUSION
    We have considered the remaining arguments and
conclude that they are unpersuasive. For the foregoing
reasons, we conclude that the district court did not err in
disqualifying Dynamic 3D’s counsel and in dismissing the
complaint, and we therefore affirm the district court’s
decision.
                       AFFIRMED
                          COSTS
   Costs to Schlumberger.
  United States Court of Appeals
      for the Federal Circuit
                  ______________________

         DYNAMIC 3D GEOSOLUTIONS LLC,
                Plaintiff-Appellant

   ACACIA RESEARCH CORPORATION, ACACIA
           RESEARCH GROUP LLC,
             Nonparties-Appellants

                              v.

 SCHLUMBERGER LIMITED (SCHLUMBERGER
     N.V.), SCHLUMBERGER HOLDINGS
CORPORATION, SCHLUMBERGER TECHNOLOGY
               CORPORATION,
              Defendants-Appellees
             ______________________

                   2015-1628, 2015-1629
                  ______________________

   Appeals from the United States District Court for the
Western District of Texas in No. 1:14-cv-00112-LY, Judge
Lee Yeakel.
                 ______________________

WALLACH, Circuit Judge, concurring.
    I concur entirely with the majority’s opinion, but write
to briefly address the honor of our profession as attorneys.
In the law, as in life, it is best if one’s conduct is such that
when accused of malefaction, the community responds as
one that “Ms. or Mr. __________ simply doesn’t act that
way.” The standard is always aspirational for we are
2      DYNAMIC 3D GEOSOLUTIONS LLC   v. SCHLUMBERGER LTD.



human, but if we do not strive to reach it, then perhaps
we ought to consider that the game’s not worth the can-
dle.
    Ms. Rutherford’s conduct failed to meet minimal
standards necessary to preserve public confidence in the
legal system, and for that, she and others paid a price.
That does not mean, however, that she should not, as a
member of what is supposed to be an honorable profes-
sion, have held herself to a higher standard.
