The over two-million-strong PLA is suing the Shenzhen Xinhe Handicraft Company for nearly $299,500 after the company used photos of three officers from the Guard of Honour and the regiment's name to advertise a toy sabre and rifle.
The montages were burnt onto CDs and albums and distributed to retailers around the country.
The PLA's legal experts say the unauthorised use of the photos infringes personal rights and damages the regiment's reputation, said China Daily.
The experts said they resorted to court action after calls for the company to stop using the photos and its name fell on deaf ears for four years.
The Beijing Haidian District
"The name, Guard of Honour of the three armed services, has been frequently used by the defendant in advertising albums and CDs. Our exclusive right to the name has been violated," a document submitted by the PLA to the court said.
"Consumers misunderstood that the Guard of Honour made the advertisement. Our reputation has been violated," the complaint said.
The document urges the court to order the company to stop using its name and pictures immediately and to issue a public apology.
However, a spokesperson for Xinhe Handicrafts denied the accusation, adding that they had not been informed of the case, the paper said.