Students Suing anti Plagiarism service TurnItIn

Two students from McLean High School in Virginia are suing the Anti-plagiarism service Turnitin for copyright violations.
Turnitin is a company that provides teachers with an easy way to catch students who have plagiarized their papers. It actively crawls the internet archiving and categorizing material posted on websites. When a teacher or student submits a paper to the service, it will compare that paper to its archive and prepare a report for the teacher on possible plagiarism instances in the paper. The report is quite detailed and allows the teacher to compare side by side the suspect paragraph or sentence with the possibly plagiarized source. At that point, it is up to the teacher to decide if the passage was plagiarism, poor referencing, or simply coincidence.
Where the possible copyright violation comes in, is in the submitting of the student’s paper. All submitted papers are also archived and added to the Turnitin database for plagiarism comparison. So that means that you won't be able to turn in a paper written by students who took the class last year, or who took a similar class at another school that also uses the service.
Turnitin claims that the use of the student’s papers is fair use and does not violate any copyrights. They claim that they are not selling or publishing the student’s papers, and are in fact protecting the students copyright on the papers by preventing someone from stealing their work.
The students claim that because Turnitin is a commercial enterprise and does not get explicit permission to use the papers, they do not qualify for fair use on the copyright issue.
The purpose of this lawsuit doesn't seem to be about protecting copyright. It seems to be more about shutting down the service. One of the parents of the students suing was quoted as saying, "My son's major objection is that he does not cheat, and this assumes he does." In researching the service for this post, I found that the presumption of guilt seems to be one of the main objections to the use of this service. My question is, does requiring the use of this service presume guilt?


McLean Students Sue Anti-Cheating Service
Official website of TurnItIn
Wikipedia Article on use of TurnItIn service