The lower court ruling put stored electronic communications held overseas beyond the reach of USA prosecutors even when there is probable cause that they contain evidence of a crime, Justice Department lawyers said in court papers.
The case involved information stored on a Microsoft server in Ireland that the USA government believed it should have access to under warrants issued in the US.
In court papers, Bloomberg reports, United States deputy solicitor general Jeffrey Wall said: "Under [Microsoft's] opinion, hundreds if not thousands of investigations of crimes... ranging from terrorism, to child pornography, to fraud... are being or will be hampered by the government's inability to obtain electronic evidence".
While oral argument has not yet been scheduled, the Supreme Court will hear the case sometime in the next year.
"We will continue to press our case in court that the Electronic Communications Privacy Act (ECPA)-a law enacted decades before there was such a thing as cloud computing-was never meant to reach within other countries' borders", Brad Smith, Microsoft's president and chief legal officer, wrote in a blog post.More news: Apple unveils gender-neutral emoji coming to iPhone
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"Congress alone has the authority and the institutional competence to craft a new legislative scheme for a world not anticipated in 1986", Microsoft argued.
Investigators wanted to look at the emails as part of a probe into suspected drug traffickers. In 2014, the court ruled that police need a warrant to search a cellphone seized during an arrest.
Though Microsoft is based in Washington state, the court said the emails were beyond the reach of US domestic search warrants issued under a 1986 law called the Stored Communications Act.
The Justice Department said in its appeal that the lower court ruling "gravely threatens public safety and national security" because it limits the government's ability to "ward off terrorism and similar national security threats and to investigate and prosecute crimes". A three-judge panel said the 1986 Stored Communications Act wasn't created to cross worldwide boundaries. We intend to share this view with the Supreme Court as it confronts this important issue. The tech giant says this legislation will provide more "sensible ways" for the government to access data stored across borders, including a "lengthy legal process" in order to access the emails of Americans. The case differed slightly to Microsoft's case, however, in that this data was regularly moved around the world to improve speed - and was never meant to be stored in one specific location.