The Icelandic Government has taken legal action against UK supermarket chain Iceland Foods over the trademark registration of the term 'Iceland'.

The supermarket chain has been trading under this name for more than four decades.

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The Icelandic Government alleged that due to this registration, national firms are not able to term their products as 'Icelandic'.

It has urged the European Union Intellectual Property Office (EU-IPO) to cancel the trademark.

"This untenable situation has caused harm to Icelandic businesses, especially its small and growing companies."

The supermarket chain was quoted by Reuters as stating: "Iceland Foods has aggressively pursued and won multiple cases against Icelandic companies, which use 'Iceland' in their representation or as part of their trademark, even in cases when the products and services do not compete."

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The government's official was quoted by BBC as saying: "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.

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"This untenable situation has caused harm to Icelandic businesses, especially its small and growing companies."

According to Iceland's foreign ministry, it is not sure how long the process would take to resolve the dispute.

Specialising in frozen food, Iceland Foods has over 800 stores across the UK and more than 23,000 employees.