The transatlantic rights spat went quiet for a few months, but it never went away. When Hachette said it would give exclusive European rights to its U.K. publishers whenever it owned world rights, it was a reminder of how far from resolution this issue really is. What's worse is that the tussle could spread to other territories.

Hachette's recent decision is, at least, action of a kind in a rights standoff between U.S. and U.K. publishers—sometimes between different geographical parts of the same group. U.K. firms, concerned about leakage into their domestic market, want exclusive rights for Europe, while U.S. publishers regard this as an assault on the principles of free trade.

The issue boiled over at last year's BookExpo America, when Simon & Schuster adult publishing president Carolyn Reidy accused the British of a "land grab" based on the "thinnest of legal and business pretenses." British agents said if U.S. publishers wanted European rights, they should match U.K. export royalty rates (typically, double U.S. levels).

Authors and their agents on both sides of the water have been stuck in the middle of this row, as U.S. publishers refuse to sign without access to Europe, and U.K. publishers refuse to buy material without European exclusivity. "It has all been made worse by some international groups that can't agree across the Atlantic," says one British publisher who lacks this geographical encumbrance. "The U.S. agent may say 'you can't have it,' but when a publisher says 'you can't have it' to its own subsidiary, then you're in trouble."

The British say that this is not about keeping the European market to themselves, but about protecting their own backyard. That's because European Union and British laws enshrine the free movement of goods from one member state to another. So while British exclusivity may stop rivals from publishing the same work in the U.K., it can't stop imports of a cheap U.S. edition from Holland or Belgium.

"We have to keep arguing very hard that European exclusivity matters," says Stephen Page, CEO of Faber and president of the Publishers Association. "Without it, we don't have U.K. exclusivity."

Page argues that, for writers, the economics favor deals offered by U.K. publishers. "U.K. royalty rates and cover prices are higher. The U.S. is deeply deflationary in the European market, particularly given the weakness of the dollar."

This is getting nearer to the heart of it. After all, the free movement laws have been in place for more than 18 years. No bulk imports of U.S. editions to Britain through the back door have been reported, so why the recent fuss?

The answer is that the world has changed. Amazon has brought cheaper U.S. editions—two-thirds of the U.K. cover price is not unusual—within reach of U.K. readers. Much more importantly, U.K. supermarkets have entered the bookselling business, and they care deeply about price. They haven't rocked the boat by buying cartloads of cheap Stephen Kings from Barcelona—yet—but British publishers are acutely aware that, one day, they might.

A number of Continental booksellers and distributors have been vociferous in their opposition to any cession of European rights. They fear that only Amazon would benefit if consumers were denied choice of editions and point out that, in the absence of competition, British publishers might behave high-handedly.

Nonetheless, someone has to budge. One British argument is that U.S. interests are overestimating what the European market might be worth to them. "There is misinformation in New York about the size of this market," says one U.K. publishing chief who didn't want to be named. "It's minute compared to their market, but it can be important to U.K. publishers. There is no unilateral way of stopping it—it has to be contractual. We're at the beginning of this conversation, not the end."

One traditional compromise has been that the Brits take Europe, while the Americans get Canada. But, as some agents point out, Canadian rights can be sold direct to Canadians, which often works better on the ground than distribution via the U.S. Hachette's internal compromise has been to promise Far East and Asian exclusivity to its U.S. interests where it has world rights. Brian DeFiore, head of the U.S. agency DeFiore and Co. has said he would prefer the Hachette model to the current uncertainty.

The tug-of-war may spread to other parts of the globe. India looks to be the next "hot potato," according to Jonathan Lloyd, CEO of U.K. agent Curtis Brown. "One U.S. publisher said to us recently, 'If you can't give me Europe, give me India,' " he reports. "Another said that if they didn't have India on submission they wouldn't offer."

However, as Lloyd points out, U.K. publishers have been investing much time and effort in the Indian market and won't take kindly to giving it away. No fat lady in view, then.