The three-judge panel said medical testimony corroborated the defense of Jan Luedecke, 35, although the judges said they might still mandate him to appear before a provincial mental health review board, the National Post reported.
Luedecke was acquitted in November 2005 on grounds of "non-insane automatism," or what became known in legal circles as "sexsomnia."
Luedecke testified he had been drinking heavily for two days when the incident occurred at a Toronto house party in 2003.
The name of the woman who filed charges cannot be published but she testified she and Luedecke were sleeping foot-to-foot on an L-shaped sofa. She awoke to find him on top of her but said he appeared very confused when she pushed him away, the report said.
Ludecke testified he had previously had similar experiences with girlfriends and said the triggers were usually sleep deprivation, stress and alcohol, the newspaper said.