Constantly facing this issue.
Was able to resolve it by adding a setenv.sh inside tomcat / bin and adding this line to it:
export JAVA_OPTS="-Dfile.encoding=UTF-8 -Xms128m -Xmx1024m -XX:PermSize=192m -XX:MaxPermSize=512m"
But, did a server reboot, restarted the services of Cognos and the error came back.
Environment: Cognos 10.2.2, Red hat Linux 6.6
I'm running 10.2.1 and simply modified bootstrap_linuxi38664.xml in the bin64 directory. I changed line 24 to:
<param condName="${java_vendor}" condValue="Sun">-XX:MaxPermSize=512m</param>
Hope this is helpful