I'm pretty happy to hear about the lawsuit by students against Turn It In since the question they're asking is one that has bothered me for a long time. This is probably compounded by the incredibly aggressive spidering they employ to herd stuff into their databases. I've had to ban them by IP address as they do not conform to the robots.txt standard.
How do you handle something like this best? Do students suspend their copyright to submitted papers when turning them in for grading? If this is the case then graduate level work at universities that buy this software (well, it's less software than service but indulge me here) is going to become a legal minefield. This is one those questions that opens a seemingly unlimited series of canned worms. I'm sure someone more familiar with all of the copyright issues rolled into this could construct a legal textbook based on all of the questions potentially posed here.
Here are mine:
1. Do public schools who use Turnitin then require students to suspend their copyright ownership while this is being funded by public funds?
2. Who becomes the copyright holder? Does a state institution transfer the ownership of a copyrighted work created by a minor to a private corporation?
3. Because school attendance is legally mandated does a requirement like this place the onus probandi on students by insisting that they surrender legal rights in order to fulfill another legal requirement?
I'm operating under a lot of assumptions here and as IANAL I might be missing some or all of the precedent here but the situations I can imagine resulting from this are uncomfortable at very best.
In the comments attached to the news story above I found a link to collection of quotes and back story on Turnitin that has some pretty valid points and the juxtaposition of some quotes from people who run the company. Grrr.