U.S. District Judge Loretta Preska in Manhattan today upheld a federal magistrate judge’s decision requiring the company to turn over e-mails in an unspecified criminal investigation. Preska put that ruling on hold to give Microsoft time to appeal.

Preska rejected Microsoft’s argument that the warrant, which requires the company to provide investigators with the contents of the customer’s MSN.com Web-based e-mail, calls for an illegal search and seizure outside the U.S. The warrant was issued in December.

Preska delivered her ruling from the bench after a two-hour hearing, setting up an appeal that may help dictate how courts apply legal protections to electronic data, particularly information stored outside the U.S.

“The only issue that was certain this morning was that the district court’s decision would not represent the final step in this process,” Redmond, Washington-based Microsoft’s general counsel, Brad Smith, said in a statement after the hearing. “We will appeal promptly and continue to advocate that people’s e- mail deserves strong privacy protection in the U.S. and around the world.”