Ohio-based Jasmine-Jade, which filed the complaint on 6 January against Borders and distributor Baker & Taylor, alleged "the bookstore giant owes Jasmine-Jade $1m in damages and the company knowingly ordered excessive numbers of books in order to reduce the amount owed and produce a credit balance in the account".

Jasmine-Jade chief executive Patricia Marks told Printing World: "We attempted for years to find a solution that would allow us to continue to do business with Borders and mitigate the losses from the returns."

Borders US said: "We believe the lawsuit does not have merit and we will vigorously defend ourselves against it."

The news was met with mixed reactions from the UK book industry.

Publishers Association chief executive Simon Juden explained that the standard practice of sale or return on front-list books put the risk with publishers, which meant they lost out on returns.

He said it was "not impossible" a similar case could occur in the UK. "I'm not sure of any particular issue in the UK of this."

"Short-run print-on-demand is the ideal solution to this," added Juden.

Emma Barnes, managing director of London-based independent publisher Snow Books, agreed that sale or return did have its downsides, but called the US case "sensationalist".

"It's paranoia in the extreme to think there's a conspiracy. A large retailer like Borders has probably got better things to do," she added.

However, Barnes said the case showed the depth of feeling around returns. "Everyone knows sale or return and accepting returns back is not an efficient way to work."

She said print-on-demand (POD) was not a realistic solution. "The unit cost of POD is so high that if we're talking about trade sales, the economics don't work."

Play.com head of books Caroline Mileham said publishers should tell retailers if they didn't think enough copies would be sold.

"But you have to be quite confident to say that. If you're a small independent publisher, you won't," added Mileham, who was formerly books category manager at Borders UK. "Small publishers are exposed."

"Retailers and publishers have to be realistic about stock management. The danger is that it becomes less likely that people will take risks and you can get to a point where the industry becomes quite samey," she said.  

Borders UK would not comment on the case.

According to a spokesperson, "Borders UK is a totally separate business and, therefore, this story about the US lawsuit has no implications for us whatsoever". Borders UK is wholly owned by private equity firm Risk Capital Partners.