A New Zealand High Court judge has ruled the police raids on Megaupload founder Kim Dotcom's mansion north of Auckland this year were illegal.
In a decision released on Thursday afternoon, Justice Helen Winkelmann also said it was unlawful for copies of Mr Dotcom's computer files to be taken by US authorities.
New Zealand police should have kept them, rather than handing them over to the FBI, she said.
German-born Mr Dotcom is accused by US authorities of facilitating internet piracy on a massive scale through his Megaupload website.
Charged with racketeering and money laundering, he's fighting attempts to extradite him to the United States after police raided Mr Dotcom's Coatesville mansion, north of Auckland, earlier this year at the request of US authorities.
FBI agents seized a massive 150 terabytes of data.
Apple co-founder Steve Wozniak says the piracy case against Mr Dotcom is "hokey" and a threat to internet innovation.
Mr Dotcom, the founder of file-sharing site Megaupload, is accused by federal authorities of facilitating internet piracy on a massive scale. Charged with racketeering and money laundering, he is fighting US attempts to extradite him from New Zealand.
Mr Wozniak said he was visiting New Zealand last month to give a speech when he learned Mr Dotcom could not visit him because he was under house arrest. So Mr Wozniak said he visited Mr Dotcom and the two have kept in touch by email since.
"It's just kind of ridiculous what they did to his life," Mr Wozniak said. "An awful lot of Kiwis support him. The US government is on thin ground."
Mr Wozniak said plenty of people used Megaupload for legitimate purposes before federal authorities shut it down in January and filed criminal charges against seven of its officers, including Mr Dotcom.
Mr Wozniak likened the Megaupload site to a highway and those who shared pirated movies and songs to speeding motorists.
"You don't just shut down the whole street because somebody is speeding," he said.
US authorities allege in their indictment that Mr Dotcom and Megaupload deliberately thwarted attempts to remove pirated material from the site by removing individual links but not the pirated content. Prosecutors claim the "mega conspiracy" netted Mr Dotcom and others $175 million in advertising revenue and download fees.
Mr Dotcom has said the charges were bogus.
"The more people learn about this case the more they realise that this type of copyright disagreement between Hollywood and new cloud storage technology is a political debate, not something that belongs in the criminal court and certainly not something to justify breaking down the door to my house," he said.
Mr Dotcom said Megaupload had been applauded for its content removal policies. But he also acknowledged the site could host pirated files.
"What people uploaded and downloaded in their storage areas was up to them. One person's licensed music MP3 file is potentially another person's infringing file," he wrote.
Mr Wozniak said he believed people should pay for content. But he also believed in keeping the internet open to encourage innovation. He said trying to shut down sites like Megaupload was futile.
"If you've got a huge steamroller coming, instead of trying to stop it, you should get out of the way," he said.
Asked if he might be being fooled by a clever conman, Mr Wozniak said it "could very well be the case".
"If I hear details that have credibility, I could totally turn against him," Mr Wozniak said. "But I'm not finding it anywhere from what I've heard so far."