John

I sympathise with you. Here in India, we have lots of folks indulging in just this kind of work and specialise in Atmels. (I know, I will be beaten for having said this). We, designers work hard for months to make a product. The moment you release it, it gets ripped off within days. You are left thinking, did I forget to lock the chip? Of course you did not. Ripping can be done in two ways - hard / soft. Hard is breaking the locks and reading the chip, soft is compromising your developer and getting the code.

The way to beat these folks is to keep 'em guessing. Change / better your features often. this way, they don't have a standard version and they incur similar costs to keep pace with your better product. Once the market knows about the better product being with you alone, they would like to buy yours. Another plus for you as a developer, you can cater to your customers customisation needs. This is something the ripper cannot do easily (especially if you coded in a HLL)

As far as litigation is considered, I am sure you can sue the pants off all the competitors folks, but, how do you prove it? I think you got some good suggestions here regarding 'footprinting' your micro. A signature analyser might be a helpful tool here. In this way, you can without ripping the chip, be able to prove that this is a clone.

I do hope you can get over being ripped off. Moreover, think about it. If it is really as you say it is, man - you must be a good designer that someone has chosen to copy your design.

Jerson