After failing to have Verizon's advertisements criticizing its network coverage pulled off of the air, AT&T has decided to drop its lawsuit against the nation's largest wireless carrier.

Both Verizon and AT&T filed an official dismissal of the case in an Atlanta, Ga., federal court Wednesday. In addition, a separate lawsuit filed by Verizon against AT&T was also dismissed.

In November, AT&T had asked the court to pull what it felt were "misleading" advertisements from Verizon, criticizing AT&T's nationwide 3G coverage. But a judge later denied that request, noting that though Verizon's ads could be construed as "sneaky," they were not misleading. Both parties were originally set to meet in court on Dec. 16 for a second chance to present their case on the proposed injunction.

The legal dispute began when AT&T filed a complaint, noting the company felt that the advertisements suggested to casual TV viewers that its wireless service did not provide coverage in most of the U.S. Parodying Apple's "There's an app for that" iPhone commercials, Verizon mocked AT&T with the slogan "There's a map for that." While Verizon's commercials highlighted the strength of its 3G data network, AT&T said customers could be mislead to think the television spot was referring to all voice and data connections.

AT&T publicly responded with a series of advertisements featuring actor Luke Wilson. Rather than focusing on 3G coverage, AT&T aimed to "set the record straight" and show that the wireless network reaches 97 percent of all Americans.

In court, Verizon responded to AT&T's claims by suggesting the carrier was overreacting to "the truth" of its wireless data service. It argued that AT&T failed to adequately invest in its own network to support growth of devices.

"AT&T sued because Verizon's ads are true and the truth hurts," the company had said.