While I am not an lawyer, don't quote me...but it was my understanding:
Round one had Naxos being sued in Federal Court. The district court
(Federal) in the State of New York granted summary judgment to Naxos. The
reasons being cited included that even if Capitol had been given a license
to issue the EMI recordings, that the UK copyrights expired and that EMI
had lost ownership and did not have the right to sell license to Capitol
or anyone else for that matter. Other aspects of the decision included the
notion that "abandonment of copyright" (other companies had already issued
some of the material and had not been sued)
indicated that Capitol had no interest in the recordings, and further,
that Naxos' reissues were an improvement on the recordings. I also find it
interesting that the Federal court cited the notion that the original
recordings were obsolete.