Manx-based brewery Bushy's says it's taking legal action after the government threatened legal action over the letters "TT".
The Santon company says it trademarked "Bushy's TT" in 2014, but the Department of Economic Development says it owns the trademark to the initials.
In a letter to Bushy's, which has been associated with the festival for decades thanks to its beer tent on Douglas Promenade each year, the department has demanded the letters are removed by the brewery.
The department also says it may try to overturn the company’s trademark.
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