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Last week, Lang Van, holder of one of the world’s largest collections of Vietnamese music, took a stand against online piracy. It levied a lawsuit, not only against the Vietnamese-based company VNG Corporation, but the venture firm IDG Ventures, which heavily invested in VNG, as well.

The suit alleges that the “pirating” website Zing, which is owned by VNG, hosted thousands of illegal recordings of Lang Van’s, ostensibly robbing Lang Van of its rightful copyright revenue. Lang Van believes IDG to be liable, as it claims that the venture firm’s investment is what caused the rampant success of VNG.

The lawsuit aims to set a precedent against online piracy overseas, which is an increasingly alarming issue. While Vietnam does have structured IP and copyright regulations, enforcing these strictures is a different matter. As Vietnam Talking Points explains it:

Basically the only way to get your IP rights enforced in Vietnam is to go to the local authorities in charge of your type of IP (Ministry of Science for patents, Ministry of Culture and Information for copyrights, Market Management Bureau for the fake bag shop down the street) and try to convince them to do something (usually they like raiding the store — it’s cooler) …

So while Vietnam’s IP laws are strong on paper, which is a very important step, there’s still a long way to go in implementing them.

This lawsuit, then, is a way to circumvent the annoyance and uncertainty of this implementation. What’s of note, however, is the fact the Lang Van is going after IDG, and not just VNG. As Ryan Becker, Lang Van’s lawyer, explained it, “VNG would not have become so successful without the involvement of the US-based venture funds.” In essence, VNG wouldn’t have been been able to launch Zing, whose entire premise is hosting illegal content, were it not for IDG’s help.

And since Zing’s popularity seems to be booming — it reportedly has 20 million users, listening to 7.1 million songs per day — IDG must be doing quite well too. “If you’re involved in getting a benefit based on infringing activity,” Becker said, “you’re liable.”

Logically, this makes sense. And this could send a message to other funds investing in potentially fraudulent foreign businesses. While it’s unlikely that this is the first venture fund being held liable for its companies’ conduct, this case is unique since Lang Van is using this lawsuit as a substitute for formal Vietnamese IP litigation.

This could set a precedent about how to go after foreign companies partaking in such illegal acts. It also could get send some messages to firms that they should be aware of the practices of their companies — especially those hosting intellectual content.

If Lang Van wins the suit, it stands to rake in as much as $500 million. We’ll have to see if a court of law buys into the idea that IDG played a prominent role in Zing’s pirating. Becker sure thinks so, probably because he’s Lang Van’s lawyer.

“These guys were actively involved with VNG’s operations,” he said. “They were not passive investors.” Now we wait to see if the court agrees.

[Image via LangVan]