In an ultra-short statement, Vonage and AT&T said late Friday that they have finalized the settlement of the patent dispute between the companies. "Vonage and AT&T have entered into a definitive agreement to settle their patent dispute, the companies announced today. The companies had agreed in principle to a settlement on November 7," the statement reads.

AT&T had sued the legally challenged company, accusing it of using packet-based telephony products, which allows voice conversations to be carried over the Internet, based on products that use technology patented by AT&T.

Earlier this month, telecommunications giant Nortel Networks filed a suit against Vonage. The lawsuit was filed in the U.S. District Court in Wilmington, Del., and it alleges that the defendant has violated no less than 12 of Nortel Networks’ patents relating to its Internet phone services, including click-to-call and the 911 and 411 services.

Nortel Networks is seeking damages, as well as an injunction on the use of the allegedly infringed technologies by Vonage. Vonage would probably not have been involved in this legal feud with Nortel, had it not acquired Digital Packet Licensing and three patents this company held. Related to those patents, Digital Packet Licensing filed a lawsuit in 2004 against Toronto-based Nortel Networks alleging patent infringement.

Also, Vonage was found in September to have willfully infringed Sprint's patents in providing its VoIP telephony services by Federal Court jurors in Kansas City. In addition, Vonage was ordered to pay $69.5 million in damages, which the jury found to represent around five percent of Vonage's revenues over the infringing period.

Vonage's troubles started in 2005, when Sprint Nextel Corp. sued the company for infringing on seven Sprint patents focusing on connecting and transmitting Internet phone calls. Along the legal battle, Vonage's main counterpoint was that those patents were flawed and shouldn't have been approved.

Vonage also settled in recent months another patent dispute with Verizon, in a deal worth up to $120 million.

It's hard to see how Vonage can recover from its current troubles. The company failed to make money from internet telephony, and now it seems practically impossible it will ever make any profit.

Olga Kharif from BusinessWeek calculated in September that Vonage had about $184.5 million in cash and equivalents to work with, and assuming Vonage continues to lose money at the current rate of $34 million per quarter, the company can last for a little over five more quarters.