The federal authorities have dropped charges against 28-years-old Matthew Crippen, who was arrested last year after allegedly jailbreaking Microsoft Xboxes and trying to sell his modifications online, after a California judge’s criticism and admission that it made several procedural errors.

Crippen was charged with two felonies for modifying Xbox 360 consoles in the first ever criminal seeing how anti-circumvention provisions of the Digital Millennium Copyright Act applied to game consoles. The law restricts hacking of technology intended to prevent access to copyrighted material.

The opening statement of the case was delayed after US District Judge Philip Gutierrez criticized prosecutors for a series of procedural errors, including unlawful conduct of government witness Tony Rosari, who secretly video tapped Crippen accepting money for his modified console. The judge also criticized prosecutors' proposed jury instructions that were described as harmful to defense.

Gutierrez said that evidence was dubiously obtained, prosecutors never gave Crippen a chance to settle and lead prosecutor Allen Chiu admitted misdirecting the jury when he remarked that Crippen could be found guilty even if he did not know that his activities were ileegal.

The federal authorities asked for recess but later went ahead with the case. Rosario has testified against the hacker saying that he inserted a pirated game into the console during their meeting about two years ago. Rosario is an undercover agent for the Entertainment Software Association.

However, after objection, prosecutors agreed to dismiss the charges in due to omission and based on fairness as they had failed to alert Crippen's defense team.