However, what's especially lethal is when you can create a negative advertising campaign that's actually true.  That's what Verizon did when it pounced on Apple's partner AT&T over the company's poor 3G coverage.  With AT&T's partner Apple recently admitting that the carrier dropped as many as 30 percent of its calls in some regions, on average, Verizon, the nation's largest carrier, pounced on its second place competitor airing a series of commercials mocking it.

AT&T took a gamble and took Verizon to court over its new "There's a map for that" commercials.  It argued that TV viewers by and large weren't smart enough to distinguish from 3G coverage maps and total coverage maps, despite the Verizon commercial providing textual and verbal indications that the maps were representative of 3G coverage.  Thus AT&T argued the commercials would mislead customers into thinking AT&T had no coverage in much of the country when it really only had no 3G coverage.

The company upped the ante when it asked for an injunction on Verizon's latest "Island of Misfit Toys" commercials, expanding the case in federal court.  However, Verizon refused to back down from its attacks, commenting in court filings "the truth hurts."

Now AT&T's Christmas wish to take its competitor's ads off the air has been met with disappointment.  U.S. District Court Judge Timothy Batten Sr. handed the telecom a lump of coal, denying their request for an injunction, commenting that while Verizon's commercials were "sneaky" they weren't misleading. 

Judge Batten Sr. commented that people might "misunderstand" the commercials, "but that doesn’t mean they’re misleading."  He even had both sides laughing when he elaborated, "Most people who are watching TV are semi-catatonic.  They’re not fully alive."

The loss is no laughing matter for AT&T, though, as it faces a worse hit to its already marred brand image, thanks to the heightened publicity the suit has given the commercials.  Recent brand studies showed that the commercials seemed to be working with Verizon's brand perception rising over the past several weeks, and AT&T's brand image plummeting.

AT&T will have one final chance to try to silence Verizon, at a second hearing on December 16.  However, with Verizon crying that AT&T is trying to silence its right to free speech and AT&T unable to directly challenge the commercials' accuracy, AT&T's hopes of a last-minute Christmas surprise seem to be growing increasingly dim.

In other news, AT&T has finally decided to combat Verizon's commercials directly with a commercial of their own. The company has employed Luke Wilson to jab Verizon on such issues as simultaneous talking/web surfing and the company's lack of “popular smartphones”. You can view the commercial here.