Why not add a software solution.... If there is a display, then display ( this item is counterfeit - call law enforcement to report the seller ) after a set period of time... Deviate the message and break it up so the string isn't easily findable...
Adding too much protection simply adds costs to the unit which need to be passed on the consumer and loses you profit margin - that money could be spent on making the product better... Adding 'protection' punishes the consumer, no one else... But, a software solution with your flash could at least expose who did it forcing them to stop after legal issues... It's also low enough profile that they may miss it..
You could do the same thing as CodeMasters, the developers of Operation Flashpoint. They created something codenamed Fade - a technology which when it detects a bad copy of the game via stolen serial number, or other means, it slowly degrades the performance of the game until it is unplayable... There were cases of false positives and that is something that has to be resolved, but the solution isn't bad because the counterfeiters will likely only turn the devices on for a moment to test they power up - they rarely ever use the device long enough to encounter something like this... The one thing you'd need to do is have a solid way to detect forgeries....
The best defense is a good offense in this case instead of defending the product, charging more to consumers, etc.. attack the forgers who will use your code or a variation of it to run their counterfeit products.... You could add a fade method to detect forgeries if the uploaded data isn't exactly what you provide ( this limits custom modifications which isn't always good ), or you can use resistance, etc.. to detect... Use a cheap circuit to monitor a component - something you know the counterfeiters would use a poor quality variation of, or something along those lines... Then you can target the hardware specifically... Make the circuit integral into the functionality and not obvious as to the purpose..
There are many different ways to protect your work - however if you punish customers who rely on your work then they will go elsewhere and you'll lose the money anyway... Counterfeiters remove things that ruin products - they remove DRM, they remove spyware, nagware, bloatware, and other garbage from everything they release. If you download a game without buying it, you won't have to deal with third party software which can monitor your computer, modify data, scan for other things, etc.. so there really is a benefit to people who want their privacy and other reasons which is why people will download games, movies, etc.. instead of buying them because when they buy, they are violated repeatedly by the manufacturer...
It is a narrow line between protecting your product and screwing your clients.
I personally don't buy games with extensive DRM, or I return them when I find out ( legally even opened games, movies, etc.. can be returned if you don't agree with their terms of use / or end user license agreement and no store can refuse to refund you if you don't agree with the license because you can only view it after you've purchased it ).. I've had games previously which installed DRM which ended up doing some very malicious things with my computer such as using my processing power and frying my components while idle, deleting files, editing files, etc.. despite having no illegal material.... There are plenty of games which install 3rd party software which runs 24/7 and you can't do anything about it other than not buying it, or not installing it... if you stop the tasks running or delete them, then the game won't run at all... but if you leave them running, they behave maliciously like a virus, track you, and can even give out passwords by opening backdoors - it's a disgusting practice... It's also why I don't put thirdparty software with my releases...