What is to stop either party from saving the data outside of the system?

Yes - the solution they have is very partial. The novelty is that they are looking at a real problem, not that they've solved it.

In the past I have speculated that we can solve the question of 2nd party copies by contract - as sharing parties we simply agree not to have external copies. What happens if we don't? Well, there are partial answers to that too. But this is getting further into the topic :)

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