The ongoing battle between Microsoft and the United States government appears to be getting interesting after a U.S. judge lifted a suspension of a previous order requiring Microsoft to hand over data being stored at a data center in Ireland.

The ruling has been defied by Microsoft as it continues to refuse to hand over to the FBI customer emails stored at the center.

Microsoft says it will appeal the ruling, and the two sides are expected to determine further action by Sept. 5. It is the latest in the ongoing drama between the FBI and Microsoft over data stored abroad. Many tech companies believe that if the U.S. is able to force Microsoft to turn over the personal information it could threaten revenue as foreign companies may think twice before getting into contracts with American-based companies.

In late July, Chief Judge Loretta Preska of the U.S. District Court in Manhattan upheld a previous ruling on the emails. The FBI says they are vital to an ongoing investigation it is conducting.

The implementation of the search warrant had been delayed so Microsoft could appeal the previous ruling. But prosecutors said that because Preska's order was not a "final, appealable order" and "because Microsoft had yet to be held in contempt, there was no legal reason to enforce the stay."

Preska apparently agrees, arguing that her order "merely confirmed the government's temporary forbearing of its right to stay enforcement of the order it secured."

Microsoft has confirmed that it plans on making an appeal and will not be turning over any data presently.

"Everyone agrees this case can and will proceed to the appeals court," a spokesman for Redmond, Wash.-based Microsoft said. "This is simply about finding the appropriate procedure for that to happen."

The case has become a tipping point for security analysts who are watching the final outcome of the court battle with much interest. It comes as scrutiny over the U.S. government's illegal surveillance programs continues to hit the general public and frustrations are on the rise.

The latest ruling is a blow for privacy and has seen much media attention as well as witnessing a number of rivals, including Cisco and Apple, file a joint amicus brief in support of Microsoft, Tech Times reports.

Almost all companies who deal with the Internet, including Internet service providers, have criticized the ruling.

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