Case Explained: 24-1996: 4DD HOLDINGS, LLC v. US [OPINION], Precedential

Court: United States Court of Appeals for the Federal Circuit

Filed: 2026-07-16

The Federal Circuit affirmed the Court of Federal Claims’ determination that damages for copyright infringement under 28 U.S.C. § 1498(b) may be calculated using a hypothetical negotiation framework rather than being strictly bound by existing licensing agreement rates, particularly where the infringing use differs materially from the licensed scope. However, the court vacated and remanded the judgment because the trial court committed legal error by applying the “book of wisdom” doctrine to consider the government’s subsequent cancellation of the TETRA project—a future event unforeseeable at the time of infringement—when assessing the parties’ bargaining positions. Additionally, the court vacated the portion of the award granting increased statutory damages for willful infringement, holding that 28 U.S.C. § 1498(b) permits only compensatory damages and precludes non-compensatory punitive damages available in private suits under 17 U.S.C. § 504(c). On remand, the trial court must recalculate damages using a hypothetical negotiation that excludes knowledge of the project’s cancellation and determine appropriate compensation for Studio copies without relying on willful infringement penalties.

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