I'm in the education business (instructor at a community college). We deal with the general version of this issue: What are we allowed to copy and distribute (to our students, to colleagues, etc.)

I'm not sure we could agree on what behavior is acceptable or ethical. We all have our own standards. But we do have laws, specifically copyright laws. And when it comes to copyright laws there's a gray area. If there's a copyright, and we deprive the copyright holder of profits when we violate copyright law, then we could be liable for monetary damages. But, if we violate copyright law, and we don't deprive the copyright holder of profits, then we can't be held liable for damages.

An example would be the following. An instructor continues to require a textbook after the book has gone out of print. Students must buy them, as they are a required purchase for the course in which they're seeking credit. But the campus bookstore sells only used copies, and they are currently out of stock. They've ordered more from the publisher, but of course the publisher can't fill the order, as they are out of stock, too. The student can buy a used book, if he can find one.

If the student can't find the book, is it ok for him to make a photocopy of his friend's book? Is it ok for his friend to scan the book, burn copies onto a CD-ROM, and give them away? Is it ok for the instructor to do it?