Marco Giannasi, who has run the The Battlefield Rest Italian trattoria, near Hampden, for 20 years, said he decided to put up the signs in the absence of any local promotion by Games organisers.
He had two signs specially made, using the Commonwealth Games logo and carrying the message "Welcome to Battlefield".
But he was shocked to receive a letter from the 2014 "brand protection legal manager" headed "Notice of Infringement".
It informed him that he was breaching legislation as the logo is a "registered trade mark" and asked him to remove the signs.
It said the exclusive use of the logo is given to sponsors.
Marco said: "A number of events are being held in Hampden, nearby, but nothing has been done here to promote the Games or the local area.
"I didn't think a sign welcoming the event to the area was doing any harm at all. I am really angry that I have been treated like this."
A Games spokeswoman said: "Managing the use of the Glasgow 2014 brand, and in particular its proximity to commercial organisations, helps protect the Games from unauthorised marketing, protects our official sponsors, and consequently underpins the commercial success of the Games."