Court decides "fair use": Turnitin.com not violating student copyright
blog.wired.com
blog.wired.com
On the other hand, you have to admit that it's weird for the students, who are forced to submit their personal works to this third-party service.
Consider an analogy: your startup got a great valuation from a VC, you're signing the papers, and suddenly the lead partner says to you, "Oh, one more thing. You have to submit copies of all of your software to Microsoft for archive purposes. But don't worry, they promised not to do anything with it!"
Sure, Microsoft will probably just leave your source code on an archive disk and never look at it. But still, it's a weird feeling.
The value the students gain from this service is authentication that their school papers are their own work, which makes their school credentials more valuable. It is a good trade-off for the students, who lose no rights at all to produce further derivative works from their original works.
Why such a fantasy would cost them $125M at least!
What I haven't seen mentioned is that when there is a match on plagiarism then the teachers do get access to the plagiarised document - so they are profiting from using and distributing copyrighted material they have no rights to.