diff --git a/pyproject-rpm-macros.spec b/pyproject-rpm-macros.spec
index 84163d2..f35e222 100644
--- a/pyproject-rpm-macros.spec
+++ b/pyproject-rpm-macros.spec
@@ -10,7 +10,7 @@ License:        MIT
 #   Increment Y and reset Z when new macros or features are added
 #   Increment Z when this is a bugfix or a cosmetic change
 # Dropping support for EOL Fedoras is *not* considered a breaking change
-Version:        1.3.4
+Version:        1.4.0
 Release:        1%{?dist}
 
 # Macro files
@@ -127,6 +127,10 @@ export HOSTNAME="rpmbuild"  # to speedup tox in network-less mock, see rhbz#1856
 %license LICENSE
 
 %changelog
+* Mon Sep 19 2022 Miro Hrončok <mhroncok@redhat.com> - 1.4.0-1
+- %%pyproject_save_files: Support License-Files installed into the *Root License Directory* from PEP 369
+- Fixes: rhbz#2127946
+
 * Tue Aug 30 2022 Otto Liljalaakso <otto.liljalaakso@iki.fi> - 1.3.4-1
 - Fix typo in internal function name
 
diff --git a/pyproject_save_files.py b/pyproject_save_files.py
index 18925f1..880dd2b 100644
--- a/pyproject_save_files.py
+++ b/pyproject_save_files.py
@@ -286,6 +286,36 @@ def module_names_from_path(path):
         return {'.'.join(parts[:x+1]) for x in range(len(parts))}
 
 
+def is_license_file(path, license_files, license_directories):
+    """
+    Check if the given BuildrootPath path matches any of the "License-File" entries.
+    The path is considered matched when resolved from any of the license_directories
+    matches string-wise what is stored in any "License-File" entry (license_files).
+
+    Examples:
+        >>> site_packages = BuildrootPath('/usr/lib/python3.12/site-packages')
+        >>> distinfo = site_packages / 'foo-1.0.dist-info'
+        >>> license_directories = [distinfo / 'licenses', distinfo]
+        >>> license_files = ['LICENSE.txt', 'AUTHORS.md']
+        >>> is_license_file(distinfo / 'AUTHORS.md', license_files, license_directories)
+        True
+        >>> is_license_file(distinfo / 'licenses/LICENSE.txt', license_files, license_directories)
+        True
+        >>> # we don't match based on directory only
+        >>> is_license_file(distinfo / 'licenses/COPYING', license_files, license_directories)  
+        False
+        >>> is_license_file(site_packages / 'foo/LICENSE.txt', license_files, license_directories)
+        False
+    """
+    if not license_files or not license_directories:
+        return False
+    for license_dir in license_directories:
+        if (path.is_relative_to(license_dir) and
+                str(path.relative_to(license_dir)) in license_files):
+            return True
+    return False
+
+
 def classify_paths(
     record_path, parsed_record_content, metadata, sitedirs, python_version, prefix
 ):
@@ -311,10 +341,17 @@ def classify_paths(
         "other": {"files": []},  # regular %file entries we could not parse :(
     }
 
+    license_files = metadata.get_all('License-File')
+    license_directory = distinfo / 'licenses'  # See PEP 369 "Root License Directory"
+    # setuptools was the first known build backend to implement License-File.
+    # Unfortunately they don't put licenses to the license directory (yet):
+    #     https://github.com/pypa/setuptools/issues/3596
+    # Hence, we check licenses in both licenses and dist-info
+    license_directories = (license_directory, distinfo)
+
     # In RECORDs generated by pip, there are no directories, only files.
     # The example RECORD from PEP 376 does not contain directories either.
     # Hence, we'll only assume files, but TODO get it officially documented.
-    license_files = metadata.get_all('License-File')
     for path in parsed_record_content:
         if path.suffix == ".pyc":
             # we handle bytecode separately
@@ -325,7 +362,7 @@ def classify_paths(
                 # RECORD and REQUESTED files are removed in %pyproject_install
                 # See PEP 627
                 continue
-            if license_files and str(path.relative_to(distinfo)) in license_files:
+            if is_license_file(path, license_files, license_directories):
                 paths["metadata"]["licenses"].append(path)
             else:
                 paths["metadata"]["files"].append(path)
diff --git a/pyproject_save_files_test_data.yaml b/pyproject_save_files_test_data.yaml
index c6d2291..44f368b 100644
--- a/pyproject_save_files_test_data.yaml
+++ b/pyproject_save_files_test_data.yaml
@@ -15484,8 +15484,8 @@ metadata:
     content: |
       Name: Django
       Version: 3.0.7
-      License-File: licenses/LICENSE
-      License-File: licenses/LICENSE.python
+      License-File: LICENSE
+      License-File: LICENSE.python
       Whatever: False data
 
 records:
diff --git a/tests/python-userpath.spec b/tests/python-userpath.spec
index 5f937fd..b26c8fd 100644
--- a/tests/python-userpath.spec
+++ b/tests/python-userpath.spec
@@ -49,6 +49,13 @@ sed -Ei '/^(coverage)$/d' requirements-dev.txt
 %check
 %pytest
 
+%if 0%{?fedora} > 35 || 0%{?rhel} > 9
+# Internal check that license file was recognized correctly with hatchling 1.9.0+
+grep '^%%license' %{pyproject_files} > tested.license
+echo '%%license %{python3_sitelib}/userpath-%{version}.dist-info/licenses/LICENSE.txt' > expected.license
+diff tested.license expected.license
+%endif
+
 
 %files -n python3-userpath -f %{pyproject_files}
 %{_bindir}/userpath