A federal appeals court on Thursday ruled that the use of crossed-out swastikas and other Nazi symbols to protest far-right extremism is acceptable in Germany, as long as the emblems show a clear rejection of Adolf Hitler's party.

In its ruling, the Federal Court of Justice in Karlsruhe threw out a heavily criticized Stuttgart state court decision to convict a 32-year-old man of violating laws that prohibit the reproduction of the banned symbols, even though he clearly did so in protest at far-right extremists.

Both the attorneys for Juergen Kamm and prosecutors had urged the appellate court to overturn the verdict, which punished Kamm with a fine of $4,745.

Kamm's company Nix Gut, a small mail-order business that sells materials over the Internet, produced stickers, buttons and T-shirts that showed swastikas clearly crossed out as a protest.

Post-World War II German laws make it illegal to display or reproduce symbols used by the Nazis, unless for scientific or educational purposes.

In the original ruling convicting him, Judge Wolfgang Kuellmer said that the purpose for using the symbols was not the issue, but rather that there was a "basic taboo" against reproducing them.

"The danger of familiarization [of the symbols] is ever-present," Kuellmer said.

The Stuttgart verdict was widely derided, with several politicians, including Greens leader Claudia Roth, expressing solidarity with Kamm by reporting themselves to investigators for having worn anti-Nazi T-shirts and buttons that included the banned symbols.

"They criminalized a scene which plays an important role in confronting fascists and Nazis," said top Greens lawmaker Volker Beck after the Thursday decision. "It's good that this foolish act of the Stuttgart court is now off the books."

In its ruling, the Karlsruhe appeals court said Kamm had not violated the intent of the law, and that it could not conceive of the items being misused by neo-Nazi groups.

"The court is convinced of the fact that members of extreme-right organizations would never make use of items that make a mockery of their 'holy' symbols," the court said in its opinion.

The court ordered that Kamm be compensated for his legal costs and damages for goods that were confiscated.