Microsoft is continuing its fight against a US federal court order that demanded that the software giant hand over email data held in a data centre overseas to US federal authorities.
The company has said that it would not release any information as it waits for the case to make its way through the appeals process, according to WindowsITPro.
The judge is now asking both Microsoft and federal prosecutors to advise her how to proceed by 5 September - this Friday.
A Microsoft spokesperson said that the company "will not be turning over the email and plans to appeal".
"Everyone agrees this case can and will proceed to the appeals court. This is simply about finding the appropriate procedure for that to happen," the spokesperson added.
This is the first time that a technology company is thought to have resisted a US search warrant seeking data that is held on its infrastructure, but outside US legal jurisdiction.
The judge had initially ruled in July that Microsoft was required to hand over email messages stored in a data centre in Ireland to US prosecutors investigating a criminal case.
However, she suspended the order after a number of technology giants in the US suggested that allowing US authorities to search and seize data held internationally was illegal. Prosecutors managed to convince her that her order could not be appealed against whereupon she lifted the suspension.
This meant that Microsoft is now legally required to hand over the email data immediately. But the Redmond, Washington-headquartered company declined to comply.
The defence suggests that prosecutors need to use a legal treaty with Ireland in order to obtain the data they want, but prosecutors have argued that the physical location of email is irrelevant because Microsoft controls the data from its US base.
This could be a landmark case for US technology companies, and will have repercussions for Microsoft. The software giant is fighting back because it knows that customers, both corporate and personal, are increasingly worried about where their data is stored and how it can be accessed by the authorities in the wake of the NSA-Snowden revelations.
This has led to many technology companies, including SAP and VMware, to build data centres in other locations to allay any fears customers have over data location, and in the case of Europe - to satisfy data privacy legislation across the EU.
Gavin Jackson, vice president and general manager of VMware's cloud services EMEA, told Computing in February that building data centres in Europe would still not stop the US government from being able to get hold of data through the US Patriot Act, but he said it would make it a lot harder for it to do so.
"We will be operating under local legal rules, so it would be much harder for [the US authorities] to ask for it, they need to know what they are looking for. So we can harden ourselves to a degree but as an American company we have to adhere to our federal governors," he claimed.
However, if the US government can demand data anywhere in the world, at any time, from any company operating in the US it will undermine the shift towards cloud computing.