Storing encrypted, copyrighted material on behalf of users
<p>Suppose a web service offers users to store their media data, some of which may be copyrighted. The service would keep metadata separate from the content itself, and that content would be transparently encrypted and decrypted on the user's device, with the keys never leaving that device. Thus, the web service has no way of making any sense of the user's files, but can use the metadata to allow sorting, organising and searching for content.<br />
Also, suppose the service might allow users to invite members of their immediate family (say, up to a maximum of five people). Those family members, in addition to the library owner, would be allowed to access the content.</p>
<p>Would that service be in violation of common copyright terms?<br />
I would argue that since a) web service cannot access the protected media itself and share it with others, and b) users essentially <a href="https://law.stackexchange.com/questions/28943/copyright-and-encrypted-backups">use the service for backups</a>, this should be fine; but I'm not sure how to approach this.</p>
<p><em>(I'm trying to gauge the viability of a side project)</em></p>

<p>An encrypted copy of a derivative work is still a copy. A person is not entitled to make a copy of a work protected by copyright without permission simply because the copy is encrypted.</p>
<p>However, making a copy purely for purposes of backup might be considered to be a fair use. If the person (or entity) storing the copy does not have access to the clear text, then the copy cannot serve as a substitute for the original, and it is hard to see how the market for the original is harmed. That tilts any analysis towards fair use, but that is not a full analysis, and one cannot say form sure how a court would rule on such a claim.</p>
<p>That assume that the possessor of the copy came by it legitimately. If the copy was itself an infringement, making further copies is almost surely not a fair use.</p>
<p>One should remember that the person who makes an encrypted copy can alweays distribute the encryption key at a later time. S/he may have no intention of doing so, and may even have promised not to do so. But s/he <strong>can</strong> always do so, and that possibility means that the encrypted copies might later be decrypted by some other party. But as long as they are not being decrypted and the other party does not (yet) have the ability to decrypt, they are no economic threat to the copyright owner.</p>
<p>Thus one cannot say how a US court would rule on such activities, if the copyright owner brought suit for copyright infringement.</p>
<p>If suit was brought in a non-US court, fair use would not apply. Other <em><strong>exceptions to copyright</strong></em> might apply, but which would depend on the jurisdiction involved.</p>

copyright software encryption