7. The use of illegal or unauthorized material, such as areas, code, or other data files is strictly prohibited.
I assume this is the rule 7 you mean. This means you can't use anything from the net which is known to be stolen or otherwise not allowed to be distributed by the original authors. There have been a number of cases where people grab packages of stolen area files and use them on their muds. Same with stolen snippets and such that weren't allowed for use on other muds.
This could probably also be extended to cover materials that book and other media authors have explicitly said they will not allow to be used.