This is in many ways the most important clause in a publishing agreement. In it you you’re granting the publisher exclusive rights in your copyright. Remember first that unless this is a work for hire, you’re not giving away ownership in your copyright to the publisher, but licensing certain rights to them.
A typical publishing grant takes three forms: English language rights in the United States, its territories, Canada, and the Philippines (“USC”), the English language throughout the world (“WEL”), or all languages throughout the world (“WAL”). On occasion an author may only license the English language rights in the United States to a publisher, typically when the author has already disposed of Canadian rights. A new trend has also emerged where US publishers are requesting Spanish language rights to the work in the United States to take advantage of the growing Spanish speaking community.
Complications arise regarding what territories are "open" - i.e. multiple publishers can sell editions of their work in the territory. This "turf war" has been discussed in great detail on other sites, so I'll only briefly summarize. In recent years British publishers have requested exclusive English language rights in Europe, arguing that due to the new export laws established by the European Union it's become easier for competing editions to appear in the British market. This turf war also extends to Asia and territories like Singapore, which at one time was part of the British Commonwealth. Suffice to say, US publishers disagree with UK publishers about what territories should be exclusive, and have gone so far as to call the UK publishers' efforts to obtain exclusivity in Europe and elsewhere a "rights grab."
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