I went looking for more information. I've extracted this from a much longer essay on copyright and intellectual property:

Hyperion is one of the UK's most adventurous classical labels. As a family-run business - set up 25 years ago by the late Ted Perry, and now run by his son Simon - it operates within the narrowest of margins; recording the kind of music the big conglomerates would never touch. In that respect it, and other companies like it, could be said to be keeping the classical record industry alive. Artists collaborating with these labels know the pickings are not rich, and are happy to earn percentage royalties on sales rather than securing substantial up-front fees.

So imagine the shockwaves felt by the industry when Mr Justice Patten ruled that Hyperion was guilty of infringing copyright and should pay a whopping £500,000 in legal costs and damages. Especially when the offending CD - Music for the Sun King - marked a unique celebration of the music of the 18th-century French composer Michel-Richard de Lalande, featuring the Birmingham-based Baroque choir Ex Cathedra. The problem lay not so much with the previously obscure Lalande, a relatively minor composer employed 300 years ago by Louis XIV's chapel at Versailles, as with a 75-year-old Australian-born academic, Dr Lionel Sawkins, whose edition of Lalande's music was used in Hyperion's recording.

Now fair's fair. Sawkins has spent a lifetime examining every crotchet, minim and quaver ever penned by Lalande in the French source material, for which he has received numerous honours from the French government. In creating his performing editions for Ex Cathedra - a procedure necessary in providing the singers with a complete score written in modern notation - Sawkins had, the judge said in his 32-page detailed judgment, recreated missing parts and made many corrections working from a number of manuscripts. The good doctor didn't just want credit, of course; he wanted dosh for his lifelong efforts.

The irony is, possibly only a couple of thousand pounds will find its way into Sawkins's pocket. The rest of the half million will be swallowed up by legal fees. Nor will Sawkins see any further returns for his work. "Given that the cost of producing the recording far outweighed the amount recouped via its sale, Hyperion will not be releasing any further copies of the recording," states Perry, who is now chasing a court appeal. Moreover, Perry is actively battening down the hatches in relation to some future early music projects, which he fears may be subject to similar problems.

Perry admits that a cock-up in communications between the various parties resulted in the Lalande recording going ahead without a resolution of any contract. That probably didn't help his case.

But he is far more concerned over a part of the judgment, which states that a claim to copyright in a new version of a musical work could not be rejected simply because the editorial composer had made no significant changes to the notes. That would be too rigid a test, it says, and not one which "properly respected the reality of what music was".

Another article, from an online journal Andante, gives a more detailed account of the editing process:

But in the case of early music, some form of editing is often required, particularly in the case of rarely performed music such as Lalande's. Original sources may be scattered around libraries in different countries, they may be incomplete or illegible, or one version may contradict another.

An editor is then needed to prepare what is known as a performing edition from the various sources. He or she must make informed decisions about any ambiguities or contradictions, and in cases where individual parts have gone missing, may even have to compose new ones in the original composer's style.

In the case of the four pieces by Lalande recorded by Ex Cathedra, Dr. Sawkins estimates that he spent 300 hours working on each. In one orchestral piece he had to compose two missing viola parts.

The nub of the dispute with Hyperion is that the record company takes the view that the music it has recorded was written by Lalande, and is in the public domain. Dr. Sawkins is entitled to be paid a fee for the use of his edition, but not to claim copyright.

It later concludes, regarding Sawkins' work:

The originality of Dr. Sawkins's composition was challenged in court with Hyperion claiming that it bore a very close resemblance to an earlier reconstruction in an existing but stylistically unfashionable edition from the 1960s by Jean-François Paillard. Dr. Sawkins's explanation, accepted by the judge, was that the harmony severely restricted his options, as they had Paillard's.

In the event, Mr. Justice Patten, who had been required to get to grips with such esoteric Baroque matters as the 'figured bass' and even what was in front of organist David Ponsford at the recording session and whether he actually played it, dismissed this approach.

He said: 'I am not persuaded that one can reject a claim to copyright in a new musical work simply because the editorial composer has made no significant changes to the notes. It seems to me this is too rigid a test and not one which properly respects the reality of what music is.

'The question to ask in any case is whether the new work is sufficiently original in terms of the skill and labour used to produce it.'

And finally, regarding the choir, Ex Cathedra's roll in this, I found this article (a portion is pasted here):

Hyperion - which is planning an appeal - has withdrawn the CD, which had sold 3,332 copies worldwide, recouping £14,000 of its £33,000 costs. Dr Sawkins' share in royalties on these sales would have amounted to about £2,900.

In his judgment, Mr Justice Patten was critical of Ex Cathedra, stating: "It was clear to me that Ex Cathedra really played both sides off to ensure that the recording did proceed."

As a result, Dr Sawkins and Hyperion went into the recording sessions "at cross purposes" regarding the copyright situation.

John Pulford, chairman of Ex Cathedra - which specialises in authentic performances of baroque music - last night said he believed the judge's comments were unfair.

"We were not on trial and had no legal representation to cover our interests," he said. "We did our best, and I did not expect our reputation would be called into question."

The dispute brought an abrupt end to a successful 12-year collaboration between Dr Sawkins and Ex Cathedra in promoting Lalande's music, during which the Birmingham choir became the first group ever to perform his music at the Proms.

Dr Sawkins, who is a leading expert on the composer and was appointed a Chevalier de l'Ordre des Arts et des Lettres by the French Government in 1996, also helped the group secure a prestigious concert performance of Lalande's music in Paris.

He said he was delighted with the judgment "which should fire a shot across the bows of record companies and ensure they recognise the rights of those who prepare thoroughly researched editions of early music".

He said he felt "totally betrayed" that Ex Cathedra did not make greater efforts to protect his interests.

He said: "When you have worked with someone for ten to 12 years and put all your enthusiasm into it, you just assume that everything will be treated, as I said in court, in an honourable and decent way."

Jeffrey Skidmore, Ex Cathedra's artistic director, said: "We tried to be the peacemakers in this, and tried to bring the two sides together. We are all very upset about it and sad that it has come to this.

"It's very easy to criticise with hindsight, but I knew nothing about Hyperion's view of copyright until it all blew up in our faces just before the recording session." Simon Perry, director of Hyperion, said the ruling was potentially catastrophic for music.

He said: "Of course editors should be paid for their work, but we do not think royalties are the appropriate means. That should be for creators of original work.

"We make 50 or 60 recordings a year and nearly every one needs editorial input at some level."

Mr Perry said he did not realise Dr Sawkins was claiming copyright until the recording session was so close that it would have cost Hyperion money to cancel it.

He agreed that poor communication by Ex Cathedra, which was in the process of changing general managers at the time, had set Hyperion and Dr Sawkins on collision course.

The first article quoted, from the News Scotsman had a remark at the end that will possibly have occurred to many following this story:

But he is far more concerned over a part of the judgment, which states that a claim to copyright in a new version of a musical work could not be rejected simply because the editorial composer had made no significant changes to the notes. That would be too rigid a test, it says, and not one which "properly respected the reality of what music was".

Subsequent to such a ruling, it now seems that any Tom, Dick or Harry could conceivably take himself off to Italy, Spain or the British Museum, copy the parts from an original score - or someone else's edition, if they were totally unscrupulous - make sufficient alterations, and hey presto, declare it an original work. All it needs then is a call to the Performing Rights (PRS) and Mechanical Copyright Protection Society (MCPS) to register the "edition", obtain a Tune Code and hope the royalties start flooding in. I doubt that's a situation even serious musicologists like Dr Sawkins would wish to see.

Come to think of it, record bosses such as Perry could just manufacture their own editions, thus avoiding expensive courtroom spats.

I suppose that is a possibility, but someone would have to know an awful lot about music to find and cut and alter the works. It seems like a low-probability worry.

Bringing this ancient music back from the dead is no easy task. It looks like Sawkins earned the right to claim copyright on the work. There ARE many ways to work around this issue, but for someone wanting a carefully restored authentic antique, whether music or art or furniture, there is a price to be paid for that restoration. Record companies crank out version after version of classical pieces, because in many ways the older popular pieces are a cash cow. But not always.

SRS