DCT

2:25-cv-00284

Watch Skins Corp v. LVMH Moet Hennessy Louis Vuitton Se

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:25-cv-00284, E.D. Tex., 03/10/2025
  • Venue Allegations: Venue is alleged based on Defendants' sales activities and regular and established places of business within the Eastern District of Texas, including retail boutiques in Plano. For the non-U.S. defendants, venue is additionally alleged to be proper in any judicial district.
  • Core Dispute: Plaintiff alleges that Defendant’s TAG Heuer Connected Calibre smartwatches infringe patents related to systems and methods for displaying NFT artworks on a watch face by cryptographically verifying the user's ownership of the underlying digital asset.
  • Technical Context: The technology operates at the intersection of luxury wearable devices and blockchain, addressing the need to authenticate and confer scarcity upon digital assets (like NFTs) for display on smartwatches.
  • Key Procedural History: The complaint notes the patents-in-suit claim priority from a provisional application filed in late 2018. No prior litigation, licensing history, or post-grant proceedings are mentioned in the complaint.

Case Timeline

Date Event
2018-11-29 Provisional application filed ('399 & '607 Patents Priority Date)
2019-07-23 '399 Patent application filed
2020-01-05 Watch Skins publicly unveils its technology at CES
2021-03-16 '607 Patent application filed
2021-05-21 Watch Skins announces launch of its wearable NFT marketplace
2021-07-02 '296 Patent application filed ('296 Patent Priority Date)
2022-02-15 U.S. Patent No. 11,250,399 issues
2022-03-01 U.S. Patent No. 11,263,607 issues
2022-06-XX TAG Heuer announces Accused Products
2023-11-21 U.S. Patent No. 11,822,296 issues
2025-03-10 Complaint filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 11,250,399 - "Watch Skins Selection Application with Blockchain Token"

The Invention Explained

  • Problem Addressed: The patent recognizes that electronically created watch faces can be copied in unlimited quantities, meaning they have "no scarcity" and "no reliable means of authentication" (ʼ399 Patent, col. 1:12-16).
  • The Patented Solution: The invention solves this by associating each digital watch face with a unique cryptographic token, such as a non-fungible token (NFT) on a blockchain. A processor in the watch device is configured to permit display of the watch face only when it can verify the user's "exclusive ownership" via the token, and to prevent display when it cannot. (ʼ399 Patent, Abstract; col. 2:11-18). This system is intended to make the digital watch face "certifiable, traceable, and transferable" (ʼ399 Patent, col. 5:8-10).
  • Technical Importance: This approach provided a method for creating verifiable digital scarcity for cosmetic items on personal wearable devices, attempting to replicate the economics of limited-edition physical luxury goods in a digital environment (ʼ399 Patent, col. 5:26-34).

Key Claims at a Glance

  • The complaint asserts independent claim 1 (Compl. ¶48).
  • The essential elements of independent claim 1 include:
    • An electronic watch system comprising a watch device (with a housing, display, and memory) and a processor.
    • The processor stores a "cryptographic code" associated with the display information.
    • The processor controls the display of information responsive to the cryptographic code indicating "exclusive ownership."
    • The processor prevents the display of information responsive to the cryptographic code "not indicating exclusive ownership."
  • The complaint reserves the right to assert additional claims (Compl. ¶43).

U.S. Patent No. 11,263,607 - "Watch Skins Selection Application with Blockchain Token"

The Invention Explained

  • Problem Addressed: As with the '399 patent, the invention seeks to remedy the lack of scarcity and authentication for digital watch faces ('607 Patent, col. 1:12-16).
  • The Patented Solution: This patent refines the concept by focusing specifically on the interaction with a user's "blockchain wallet." The system's processor is configured to receive a user request to display a watch face, and then explicitly "verify that a blockchain wallet associated with the user holds a cryptographic token" for that face. Based on the success or failure of this verification, the system either effectuates or prevents the presentation of the watch face on the display. ('607 Patent, Abstract; Fig. 7).
  • Technical Importance: The invention's focus on verifying token ownership within a user's "blockchain wallet" directly addresses a central component of the user experience and technical architecture of the emerging NFT ecosystem ('607 Patent, col. 6:5-12).

Key Claims at a Glance

  • The complaint asserts independent claim 1 (Compl. ¶58).
  • The essential elements of independent claim 1 include:
    • An electronic watch system comprising a watch display and one or more processors.
    • The processors are configured to receive a user request to present a watch face.
    • The processors "verify that a blockchain wallet associated with the user holds a cryptographic token" for the watch face.
    • Responsive to successful verification, the processors "effectuate presentation of the watch face."
    • Responsive to a failure of verification, the processors "prevent presentation of the watch face."
  • The complaint reserves the right to assert additional claims (Compl. ¶43).

U.S. Patent No. 11,822,296 - "Systems And Methods For Creating A Customized Watch Face And Retrieving the Watch Face To Be Displayed"

  • Technology Synopsis: The patent discloses a system for retrieving a customized watch face for display. The system's processors are configured to receive a display request and, in response, determine whether a user's wallet on a "decentralized ledger" holds the non-fungible token associated with the requested watch face. ('296 Patent, Abstract). Based on this determination, the system either facilitates the display by transmitting information to the watch screen or takes no further action, thereby preventing the display ('296 Patent, col. 2:1-5).
  • Asserted Claims: The complaint asserts independent claim 1 (Compl. ¶68).
  • Accused Features: The accused functionality is the TAG Heuer Connected Calibre E4 smartwatch's system for connecting to a user's crypto wallet and displaying NFT artworks only after verifying the user's ownership of the token on a blockchain (Compl. ¶¶69-77).

III. The Accused Instrumentality

Product Identification

  • The "Accused Instrumentalities" are identified as the "TAG Heuer Connected Calibre E3 Smartwatch and TAG Heuer Connected Calibre E4 Smartwatch, as well as products and services with reasonably similar functionality, including all TAG Heuer watches with NFT viewer functionality" (Compl. ¶35).

Functionality and Market Context

  • The complaint alleges the accused smartwatches possess an "NFT Viewer" feature that allows users to connect to a crypto wallet to display NFT artworks on the watch face (Compl. ¶49, Ex. G). This feature is presented as a way to wear "valuable and highly collectible artworks... with a verified proof of ownership" (Compl. ¶51). The complaint cites TAG Heuer's marketing materials, which state the watch connects to a crypto wallet "to guarantee authenticity" and supports the Ethereum blockchain (Compl. ¶52, Ex. F; ¶62, Ex. H). The complaint also points to a TAG Heuer FAQ page as evidence that the watch is configured to not display an NFT if the user's wallet no longer owns it (Compl. ¶63, Ex. I). This functionality is positioned as part of TAG Heuer's "expanding digital ecosystem of apps and watch faces" for the luxury market (Compl. ¶24).

IV. Analysis of Infringement Allegations

'399 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
An electronic watch system, comprising: a watch device, having a housing, a display face, and a memory storing information for displaying on the display face; and a processor... The TAG Heuer Connected Calibre E4 Smartwatch is an electronic watch system that includes a case (housing), a display, a processor (Qualcomm Snapdragon Wear), and memory to store information for display (Compl. ¶49, Ex. G). ¶50 col. 2:62-3
...storing a cryptographic code associated with the information for displaying on the display face... The processor is connected to a crypto wallet which holds the NFT (cryptographic code) that represents the artwork to be displayed. The complaint alleges this connection guarantees the authenticity of the artwork (Compl. ¶51). ¶51 col. 5:49-55
...and the processor controlling the information to be displayed on the display face responsive to the cryptographic code... indicating exclusive ownership of the information to be displayed on the display face The processor displays the NFT artwork only after connecting to the user's crypto wallet to verify that the user has "a verified proof of ownership" of the NFT (Compl. ¶52, Ex. F). ¶52 col. 6:20-29
...and the processor controlling the information and not allowing the information to be displayed... responsive to the cryptographic code... not indicating exclusive ownership... When a user's crypto wallet no longer owns the NFT, the watch is configured to not allow the artwork to be displayed, as explained in a company FAQ (Compl. ¶63, Ex. I). ¶53 col. 6:44-48

Identified Points of Contention

  • Scope Questions: A central question may be whether the accused product's architecture meets the limitation of the processor "storing a cryptographic code." The '399 Patent specification discloses an embodiment where the token is stored "in an electronic memory on the watch itself" ('399 Patent, col. 6:7-9). The complaint alleges the accused product "connects to a crypto wallet" (Compl. ¶51), raising the question of whether this connection to an external or third-party wallet service satisfies the "storing" limitation as construed by the court.
  • Technical Questions: The complaint relies heavily on marketing statements like "guarantee authenticity" (Compl. ¶51). The actual technical method used by the TAG Heuer watch to verify ownership will be critical. A dispute may arise over whether the accused product's API calls to a wallet service perform the specific function of "indicating exclusive ownership" as required by the claim, or if there is a technical distinction between the claimed method and the accused implementation.

V. Key Claim Terms for Construction

The Term: "cryptographic code" ('399 Patent, Claim 1)

  • Context and Importance: The definition of this term is fundamental to the infringement analysis. Practitioners may focus on this term because its scope will determine whether an NFT held in an external, third-party crypto wallet (as is common practice and appears to be the case in the accused product) falls within the claim language, which could be interpreted to require on-device storage.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes the code in general terms as a "blockchain based token" or "smart contract" ('399 Patent, col. 2:16-18). The claim's use of the phrase "associated with" may be argued to be broad enough to encompass a logical link to a token stored externally, not just physical storage on the device itself.
    • Evidence for a Narrower Interpretation: The specification provides a specific example where "both the hash code and the blockchain wallet are stored in an electronic memory on the watch itself" ('399 Patent, col. 6:7-9). This language could be used to support a narrower construction that requires the cryptographic code to be stored locally on the watch device.

The Term: "verify that a blockchain wallet associated with the user holds a cryptographic token" ('607 Patent, Claim 1)

  • Context and Importance: This term is the central active step in the '607 patent's asserted claim. The dispute will likely focus on the technical standard required to "verify" ownership.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent's flowchart describes this step at a high level as "Verifies hash" (Fig. 7), which could suggest a general check is sufficient. A party could argue that any process that confirms the token's presence in the wallet, including relying on data from a wallet provider's API, meets this limitation.
    • Evidence for a Narrower Interpretation: The specification describes using the ""owner of"" function on an Ethereum token to "return the address of the owner of the token" ('607 Patent, col. 6:33-37). This may support an argument that "verify" requires a specific, cryptographically robust, on-chain lookup, rather than merely trusting an off-chain representation of wallet contents provided by a third party.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges that Defendants induce infringement by actively encouraging and instructing customers, through user manuals and marketing materials, to use the accused smartwatches in ways that practice the claimed methods (e.g., connecting a crypto wallet to display an NFT) (Compl. ¶¶47, 57, 67).
  • Willful Infringement: Willfulness is alleged based on Defendants' knowledge of the patents-in-suit, which the complaint asserts exists from "at least the filing and service of this Complaint" (Compl. ¶47). The complaint also alleges pre-suit knowledge based on constructive notice from Plaintiff's product marking "since June 2022" (Compl. ¶37).

VII. Analyst’s Conclusion: Key Questions for the Case

  • A core issue will be one of architectural scope: Can the patent claims, particularly the '399 patent's language which discloses an embodiment with on-device storage, be construed to cover the accused system's architecture, which appears to rely on a connection to an external, third-party crypto wallet to confirm NFT ownership?
  • A key evidentiary question will be one of technical mechanism: Does the accused product's process of connecting to a wallet to "guarantee authenticity" perform the specific function of "verifying" ownership as required by the claims, or is there a fundamental mismatch between the claimed security method and the accused product's technical implementation?
  • A third issue may be one of patent eligibility: Defendants may challenge the patents under 35 U.S.C. § 101, arguing the claims are directed to the abstract idea of verifying ownership for the purpose of controlling access to digital content. The resolution will likely depend on whether the court views the claims' specific implementation using a cryptographic token and a watch processor as a patent-eligible improvement to computer functionality, as the Plaintiff argues (Compl. ¶¶29-30), or as a conventional idea applied with a generic computer.