The Icelandic government says "unrealistic and unacceptable" demands by food chain Iceland has forced it to go to court to protect the country's national identity.
The Nordic nation, which has a history of frostiness with the UK grocer of the same name, said it had lodged a legal challenge at the EU's Intellectual Property Office.
The aim, it said, was to ensure "the right of Icelandic companies to use the word 'Iceland' in relation to their goods and services".
The statement continued: "The government of Iceland is concerned that our country's businesses are unable to promote themselves across Europe in association with their place of origin - a place of which we are rightly proud
and enjoys a very positive national branding.
and enjoys a very positive national branding.
"This untenable situation has caused harm to Icelandic businesses, especially its small and growing companies.
A company or product made in Iceland or by an Icelandic company should be able to represent itself using the name of the country."
The government said Iceland Foods, which holds a European trademark, had "aggressively pursued" and won
multiple cases against Icelandic companies which had used the word Iceland.
multiple cases against Icelandic companies which had used the word Iceland.
The company responded: "We very much regret that the Government of Iceland has apparently decided to take legal action over the use of the name Iceland.
"Contrary to their assertion we have received no recent approaches to achieve an amicable resolution of this issue, which would be our preferred approach.
"While we will vigorously defend Iceland Foods' established rights where there is any risk of confusion between our business and Iceland the country, we have been trading successfully for 46 years under the name Iceland and do not believe that any serious confusion or conflict has ever arisen in the public mind, or is likely to do so."
The chain has recently been enjoying a pick-up in its UK market share following investment in its offering, including a facelift for stores.
It has at least 850 outlets employing 23,000 staff in total.
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