In a move that will be welcomed by technology companies the US Second Circuit Court of Appeals has, in a landmark decision (the "Decision"), overturned a decision of a lower court that would have compelled Microsoft to comply with a search warrant requiring them hand over to US law enforcement authorities emails stored on a server in Dublin in a narcotics case.

The search warrant was originally issued under the Stored Communications Act ("SCA"), however in the Decision it was held that, in the absence of a clear contrary intent against the presumption against extraterritorial application, the SCA did not have extraterritorial effect and so could not compel compliance with a search warrant outside of the US. The Decision also emphasised that the focus of the SCA is primary to "protect users' privacy interests".

The Decision is important in the context of the fall out over Safe Harbor and gives some comfort that data held outside of the US, for example in a cloud system, will be protected from seizure by US law enforcement authorities, an important message in light of the new Privacy Shield regime.

The text of the Decision can be accessed here.