This smartwatch was a prototype that was developed sometime in 2013 under the codename Gem. If it had been released it would have fallen under the Nexus brand of devices.
There are few hard details which have been shared by the source, but some information can be gleaned from the photos. It's not clear how big the screen is or its resolution, but we can see that the wristband is rubber and includes an integrated USB dongle - probably for charging and loading data from your PC. As you can see in the diagram below, there are several buttons on the face and sides of the smartwatch, suggesting that this prototype might not have had a touchscreen.
It's actually a pretty crude looking design when compared to some of the smartwatches released in the past 6 months, but I'm not sure that had anything to do with it being passed over. This is a prototype, after all, and the final design could have ended up looking considerably different.