The Chinese government's guesthouse has filed a lawsuit against Dutch firm Philips in Beijing on Tuesday. The suit alleges that Philips posted advertisements claiming that some of its products were used in the guesthouse, when in fact it is not.

China Daily reported that the Dutch electronics company advertised that its air purifiers were installed in the Diaoyutai guesthouse for use in the APEC summit held last year. The ads were posted in both print and online media.

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The Diaoyutai government house, which is reportedly under China's Foreign Ministry, was inaugurated in 1959. It has hosted more than a thousand parties for foreign government officials and other top guests. Some of the most notable guests to have been at this guesthouse include American President Ronald Reagan, UK Premier Lady Margaret Thatcher and North Korean Leader Kim Il-Sung.

Officials at the guesthouse have disputed the Philips ads and declared that they have not bought air purifiers from the company. The lawsuit alleges that the Philips made the story up to take advantage of the guesthouse's international reputation.

According to the lawsuit, the Netherlands based firm must take down all the false adverts related to the Diaoyutai house. About 100,000 yuan ($16,000) is also being demnded from Philips for damages. The suit also requires the firm to post an apology in a publication that will be circulated around the country twice

Legal representatives from the government house said that they have transmitted numerous written communications about the matter. However, the electronics firm has allegedly not answered any of their letters. The case has been forwarded to a Beijing court in Haidian.

The amount of damages being asked is a measly amount for a multinational firm like Philips.  Experts say the company could ill afford to offend one of its largest buyers. Reuters report that China contributed around 12 percent of Philips gross income in 2014.

Yahoo News reported that a number of foreign companies have been sued over legal issues in China.

One such case involved Apple. The American company was sued by a Chinese firm over copyright infringements. Apple later settled the issue by paying up $60 million.

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