LG Group’s plan to name its new holding company “LX” faces a setback as another company threatens legal action to stop the move, claiming rights over the name.

The state-run Land and Geospatial Informatix Corporation announced Tuesday that it would take legal action against LG Group to prevent the South Korean conglomerate from using its trade name, which it has used for around 10 years.

The Land and Geospatial Informatix Corp.’s steering committee met Friday to discuss how to respond to LG Group’s planned application of its trademark. The committee concluded that it should take legal action.

Board members of the original LX also expressed concerns that LG Group’s attempt to use its trademark could cause confusion among the public, LX said.

In 2012, LX introduced its new corporate identity and brand image. The company changed the signboards and promotional images displayed at its 12 local headquarters and 169 regional offices.

LX has spent a total of 33.2 billion won ($29.41 million) to promote its brand to date, the company said. There are around 43,000 media reports that include the company’s name, LX added.

LG Group expressed regret over LX’s decision to take legal action. LG Group said the two entities had held meetings since Tuesday last week to discuss options to minimize the confusion.

The conglomerate added that its new holding company’s corporate image would cause no confusion as its logo, design and color would be very different from those of the first LX, dismissing the state-run company’s argument.

LG Group said the two entities need to make efforts to continue discussions and cooperate instead of engaging in unnecessary disputes.

LG Group will confirm the split-off plan and the naming of the holding company at its general shareholders meeting scheduled for March 26. If approved, the conglomerate will run with two holding firms.

In November last year, LG Group announced that it would split off four of its 13 affiliates and establish a new holding firm to be headed by Koo Bon-joon, uncle of current LG Chairman Koo Kwang-mo.

By Shim Woo-hyun (ws@heraldcorp.com)