The Department of Economic Development says it's acting to defend an existing rights-holder in the row about Bushy's brewery using the TT initials.
Departmental member Rob Callister says another company has paid a six-figure sum to have exclusive rights to official TT garments, and that contract has to be honoured.
He was speaking out after thousands of people took to Facebook and Twitter to protest after the department wrote to Bushy's threatening legal action.
Mr Callister says he's talking to the company about the issue, but the government has to protect official suppliers:
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