Software giant Microsoft has agreed that it is in contempt of court so that it can appeal a case where it will have to hand over Irish emails to US government spooks.

The government insists that Redmond, as a US company has to hand over e-mails stored on a Microsoft server in Dublin, Ireland, that are related to an investigation into narcotics trafficking. Microsoft say that is wrong and that the ability to enforce US law stops at the nation's borders.

US District Judge Loretta Preska sided with the government, but Microsoft stated that it would still not hand over the e-mail and would continue to an appeals court. The government said that if Microsoft wanted to do that, it should be held in contempt.

Microsoft and the Department of Justice agreed to a deal in which it would be held in contempt, but not be punished in any way—for now. The government said it "reserves its right to seek sanctions" if the situation changes.