Dan Curtis eventually got Cobert to adapt the tune into "Josette's Music Box," but I'm not sure if that was because he didn't want to pay royalities to Farnon or because he simply wanted something more original for DS.
Dan Curtis allegedly just didn't like using music that he didn't own. I believe the Farnon piece was ABC stock music, so I don't think Farnon was receiving any money from the tune when it was played. (I'm not sure about that, though.)
Anyway, Cobert's version is definitely superior (and my favorite piece of music).
Personally, several times while watching the original Barnabas storyline, I have wished that someone would go in and edit out the Farnon music, and replace it with the Cobert theme. While there was always inconsistency with Dark Shadows, the one thing that was constant was the music, especially the main tunes. All of them remained the same throughout the series, except Josette's music box, and that has always bothered me.