A federal judge last week lifted a stay on her earlier order directing Microsoft to hand over a customer's email stored in an Ireland data center to US officials. The software giant has no intention to comply, and will fight the ruling instead.

The case centers on the prosecution of a drug trafficker, with prosecutors demanding Microsoft hand over his emails stored in its Dublin servers.

Back in July, Chief Judge Loretta Preska of the US District Court in Manhattan upheld a magistrate judge's ruling on the emails, saying "it is a question of control, not a question of the location of that information". She, however, stayed the effect of her ruling to give the company time to appeal.

But after prosecutors argued that there was no legal reason to enforce the stay, as her order was not a "final, appealable order" and because Microsoft had yet to be held in contempt, Preska changed her mind, saying that the order "merely confirmed the government's temporary forbearing of its right to stay enforcement of the order it secured". She has now asked asked both parties to advise her how to proceed by this Friday.

On the other hand, Microsoft continues to be defiant by refusing to turn over the requested data. "Everyone agrees this case can and will proceed to the appeals court. This is simply about finding the appropriate procedure for that to happen", a spokesman for the Redmond-based company said.

Besides raising privacy concerns, Microsoft had also argued that forcing it to turn over emails stored overseas could damage US foreign relations, and that other countries could reciprocate in the same manner. Other technology companies like Apple, Cisco, Verizon, and AT&T have also backed Microsoft's arguments in this case.