Hi
Contact Apple Support (mail-in service may be available), make a Genius Bar reservation or visit an Apple Authorised Service Provider to arrange for your watch to be inspected and to establish your available service options, whether under warranty (depending on your coverage and Apple's decision) or via chargeable repair service:
- Contact - Official Apple Support
- https://twitter.com/applesupport
- http://www.apple.com/retail/geniusbar/
- https://locate.apple.com
Note that no-one here can tell you what Apple will decide in respect of the issue being covered under warranty. You are not talking to Apple here - this is a user-based technical support community.