Microsoft has scored a prominent legal win as a federal appeals court has declined a governmental appeal in a cloud computing case. The technology company was embroiled in a struggle with the US government over access to its data stored on servers located in Ireland. The ruling is expected to have important implications for data privacy issues.

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The case began after the US government pressurized Microsoft to release data from its Irish servers to aid regulators in conducting a drug case. The government had argued, that despite their actual physical location, the servers were covered under US warrant jurisdiction. The court ruled of Microsoft in the case last year.

Microsoft had acceded to the demands related to its data stored in the US. Microsoft's stand not to release the data stored on its foreign servers was widely applauded by privacy rights activists. The judging committee also noted that 1986 Store Communication Act needs to be amended properly to reflect the modern technicalities.

The latest ruling ensures that US authorities will not be able to invoke the Stored Communications Act to access its data stored on foreign servers. The case is considered significant as it forces lawmakers to adjust their requirements in the wake of new realities of cloud computing.

Microsoft President and Chief Legal Officer Brad Smith said, "We need Congress to modernize the law both to keep people safe and ensure that governments everywhere respect each other's borders." He added that the Congress should focus on the future and legislate accordingly.

Both dissenting and concurring judges on the panel put forth their point of view. Dissenting Judge Dennis Jacob said that the demand for data was not beyond the jurisdiction of the US government as the data could be easily accessed from a computer in Redmond. Another judge said that such a ruling might render law enforcement efforts powerless.