How do I make it so you can only pick up one instance of a tool?

Well, I'd put the tool as a model in Workspace, not the actual Tool itself. So, you'd have a model that you can't pick up. Then, from there, I'd add a Touched event and put it inside the biggest part if the model. Then, once I have my Touched Event laid out, I'll use the FindFirstChild Method to check if the Player already has it. If not, it'll then clone it and put it in their Backpack.

Tool = "Tool name here"

script.Parent.Touched:connect(function(hit) -- Touched Event w/ the connection line
    if hit.Parent and game.Players:GetPlayerFromCharacter(hit.Parent) then -- Checks if it's a player
        p = game.Players:GetPlayerFromCharacter(hit.Parent) -- Sets the player variable
        if not p.Backpack:findFirstChild(Tool) then -- Checks if it is in their backpack. If not, then do the following
            copy = game.ServerStorage[Tool]:clone() -- clone the tool
            --copy2 = game.ServerStorage[Tool]:clone()
            copy.Parent = p.Backpack -- put it in their backpack
            --copy2.Parent = p.StarterGear
            script.Parent.Parent:Destroy() -- Destroys the fake gun (Model). Make sure this leads to the ACTUAL Model
        end
    end
end)