You are looking at a resource leak on your server, more than likely... Either handle related, or memory related...
I've had this happen a lot, and it's always the case... There CAN be other causes, but I think a resource leak is your #1 cause...
You are going to have to either find it and fix it, or start putting debug checks in on all memory allocations, handle allocations, and log them anytime you can't get memory, or handles.
It's also possible that your CLIENT machine is out of resources, but usually, it's the server at fault...
Failing all that, give us some more idea of what you are doing, what the code looks like, etc, to help spot issues. Just based on the error alone, isn't a lot to go on...
Best Answer
You can't stop the kernel from copying files. If you want to stop the user from copying files, then you need to write a hook that implements the ICopyHook interface.