The use of watermarking may or may not be legitimate ie the webmaster laying claim to other peoples' efforts.
Mike may be able to throw some light on this but I think the AWM collection includes tens of thousands of photos in the public domain yet they still watermark them.
A case in point is a whole series of photos taken by my father in New Guinea during WW2 on his private camera. He says his CO while in a visit to Terapo, where he was movement control officer loading the landing barges to go up river to the Bulldog Track and Wau, asked for copies of the photos so he gave him the negatives (he still has the original photos). Lo and behold he only found them recently at age 92 when I showed him how to search the AWM collection - acknowledging him as photographer - but watermarked as AWM material?
The AWM must have tens of thousands of personal photos which are now in the public domain watermarked. Having to quite reasonably cover the cost for the archiving, copying etc by making you pay for hard copies of photos you want is one thing but this is a national collection which the taxpayers rightly should maintain and they should not be able to deface electronically photos submitted by individuals for the enlightenment of the future generations.
If the photographer was on the payroll eg Damien Parer then the government/AWM fairly own them until copyright expires - which I think has now happened to much of the material.
It is all such a grey area full of miffed people complaining of their stuff being stolen (most of which they stole, borrowed, edited or rewrote in the first place) and bush lawyers claiming rights under probably the most subjective, airy fairy and unenforcable area of law - that of copyright.
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