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.
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.
Would that service be in violation of common copyright terms?
I would argue that since a) web service cannot access the protected media itself and share it with others, and b) users essentially use the service for backups, this should be fine; but I'm not sure how to approach this.
(I'm trying to gauge the viability of a side project)