The ban at Mount Saint Vincent University, which came at the request of the students, is against software called Plagiarism Prevention from Turnitin.com.
Turnitin maintains a database of millions of essays and compares submitted papers not only against those but also against websites and other published works.
However, student groups said the measues were too punitive, automatically presumed guilt and created a climate of fear.
They were also concerned that the US-based service could be subject to searches under the Patriot Act and students were worried about intellectual property right issues.
The university says that it was more concerned that the plagiarism detection software should not require that a students' work should become part of an external database where other parties might have access to it.
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