"When you upload or otherwise submit content to our Services, you give Google (and those we work with) a worldwide licence to use, host, store, reproduce, modify, create derivative works (such as those resulting from translations, adaptations or other changes that we make so that your content works better with our Services), communicate, publish, publicly perform, publicly display and distribute such content." – Google Terms of Service modified March 1, 2012.
Those rights theoretically mean Google's license is limited to using your content to promote or enrich itself.
Coincidentally, promoting or enriching yourself using someone else's content is one courts use to decide if copyright infringement has caused enough damage for the authors to justify punitive awards.
In addition to giving authors the right to publish their own work, Copyright gives them the power to prevent others from publishing it.
By that criterion, Google takes half ownership of your copyright the minute you upload it.
If an employee of notoriously litigious Walt Disney Co. uploaded the script for the fifth Pirates of the Caribbean movie to Google Drive, for example, under the Terms of Service, Google would have the right to republish and distribute the script, change it, make the movie itself, or write and shoot the sixth installment itself, without paying Disney a dime.
There's no way that kind of claim can stand, of course. Not even for companies with smaller armies of lawyers than the Mouse.
Extraordinary claims of rights or privilege in generic software licenses or terms of service rarely survive being tested in court.
Before they are tested by application to someone with the grit and money to sue the license issuer, however, vendors can use those claims to put a lot of pressure on customers more afraid of the cost of a lawsuit than of whatever negligible risk there might be that Google would steal the intellectual property in files an employee stashed in Google Drive.
Google Drive is a file locker service– storage space available free or for small money to anyone who wants an online site from which they can get to their documents no matter where they are or what device they're using.
It's not a social network or participatory service, like Facebook, whose main point is to present content posted by users.