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Copyright in Bibliographic records?

I hope this is not too far off mainstream for this list, but I don't quite
know where else to ask. 

On another library list to which I subscribe the question has just been
raised about reuse of bib records from another library's catalogue,
generally without permission, by Z39.50 client/server (or, for that
matter, otherwise).  Extracts follow. 

(1) (originator of thread)> I've heard from colleagues lately who are
quite pleased with their newfound ability to download bib records over the
internet from major online catalogues and then modify these records for
use in their own local systems. 

  Is this strictly kosher?
 If so, why is my library paying big bucks to OCLC each year?

(2) > I think that this is going to be a major issue in the near future. 
I think that the problem is still so new that no one really knows how to
deal with it.  I could see vendors like OCLC being very unhappy with this
situation.  In some respects it is almost like piracy???  I may be able to
download a record from another library at no cost to me.  However, that
other library most likely downloaded that record from OCLC! So you are
really using an OCLC record that someone else paid for.  Of course you
could also download locally generated records -- that would not be a
problem for OCLC, but that library sure put a lot of time and money into
creating it.  Another problem is that many libraries depend on OCLC for
ILL.  IF I download a record from another library and bypass OCLC, then my
library's holdings will not be updated for ILL purposes. 

(3) > If you want to play devil's advocate, you can argue that much of
OCLC's WorldCat is based on records they tapeloaded from LC (and then
turned around and charged their clients to use/download), and therefore
were created with public monies. 

(4) > Aren't MARC records produced by the Library of Congress public
records?  Aren't the bibliographic records I produce on our Dynix system
public records?  Wouldn't such laws as the Governnment Records Access
Management Act here in Utah, which determine the public nature as well as
access to various kinds of records, be more applicable?  <snip> If most of
these records were produced at public expense, even those that come from
RLIN, WLN and OCLC members, why should I pay for them twice if I am not
using a copyrighted database? 

Although I work in the Australian environment, the questions seem to me to
be much the same, even if the details differ; and since it is possible to
do all these things irrespective of national boundaries, what law applies? 
Does it make any difference whether the records were created with public
monies (I suspect not). 

Hoping for some light on this matter.

Hal Cain, Joint Theological Library, Parkville, Victoria, Australia.
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