An invention to be properly patented must be new and therefore must never have been produced, commercialized or even just presented to the public before the patent application has been filed. On the contrary, the patent loses its validity and anyone could produce it. Your friend was probably referring to this particular instance, but before jumping to conclusions it is worth analysing the concrete situation, as the risk of copying a patent is very high. The first thing to do is not to mix up the date of granting the patent with the date of filing it. It can very well happen that a patent has been filed on a certain date and has only been granted after several years, therefore, as in this case, it is possible that the supplier has filed the application on a date prior to the trading, but has had the granting some time afterwards. In such situations the fact that the item has been commercialised between the filing and the granting of the patent will not damage in any way the patent holder, and certainly nobody could produce it without his authorization. Given the supply association between the two parties, it might be prudent to check the content of possible clauses in the contract, as often, in supplies of this kind, a veto of competition is clearly foreseen which would further prevent a distributor producing on his own.