Here's an interesting article... http://www.washingtonpost.com/wp-dyn/content/article/2006/09/21/AR2006092101800.html
I am not a lawyer but having filed numerous patents, trademarks and copyrights with the US Patent and Trademark Office, I have been told that all original written work have implied copyrights, Copyrights are the weakest of all intellectual property protections although if properly executed, they are as powerful as trademarks or patents.
Original work is always copyrighted. I am not sure about derivative works. Maybe a lawyer can comment on this blog about derivative works.
A student who writes an original paper on the impeachment process or genetic mutations has an implied copyright to his work and it cannot be used or exploited for any other purpose other than the student's original intent. In most cases, the purpose is to satisfy the requirements of course work.
In my humble opinion, students do not surrender rights to their copyrighted work to anyone other than the teacher or professor and perhaps the school for the SOLE purpose of satisfying course work. The school has no right to submit the copyrighted work to any another company for such company's archiving and further using the copyrighted works as part of a database which is used for commercial gain.
The only ones arguing that the practice is legal are school administrators who were caught with their pants down and the company who is using the original, copyrighted work of students for commercial gain. In my opinion, no one has the right to appropriate the copyrighted original work of anyone for commercial gain without properly compensating the copyright owner.
As a matter of conjecture and personal opinion: If it is true that 60% of student works are plagiarized, then 40% of content of turnitin.com's database could be students' copyrighted works. I can guess that copyrighted works have no releases from their authors and are being used for commercial gain without paying the students/authors/copyright owners. This could be one of the biggest breaches of copyright law in history.
I am not sure who is cheating in this controversy. I am on the students side!