The Glostrup court said Wednesday that the man fondled the teenagers while sleeping in his suburban Copenhagen apartment after a party in 2011.
The girls awoke and interrupted the man, and later reported him to police.
But the court cleared the 31-year-old of sex crimes charges, saying medical tests show he suffers from "sexsomnia" in which a person engages in sexual activity while asleep.
Michael Laub, a Danish sleep specialist who wasn't involved in the case, said it's a rare but widely recognized sleep disorder.
The defendant said he had no recollection of what happened.
Prosecutor Martin von Buelow said he wouldn't appeal the ruling.
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