So, you suspect, because they knew what chip you used, they brute-force attacked it, found your security 'key', and managed to simply download your code using normal programming tools? And so, hiding the chip will stop them?
All current security schemes are only meant to protect from your average 'amateur' hacker, not the determined professionals with the right (possibly, quite expensive) equipment at their disposal.
Well, if they copied your MCU by photocopying its memory contents (think of X-ray like method), no amount of demarking can hide the chip from them. They can still see the chip and can even identify it by its internal shape. No amount of Flash security can make a difference in this case. They simply copy the Flash contents as-is without using BDM, or other physical connection to the chip. They don't even have to power it up, so certain anti-tamper schemes to erase all contents also fail.
As you know, the HC08 also has security, and it is even automatically engaged simply by programming the chip, as the security is based on the contents of a certain range of its vector memory. The S08 only changes the method of security, while allowing the option of no security at all. But all this security is related to 'entering' the chip the expected way. If the chip's memory contents, however, can be 'seen' via other methods, all Flash security methods of the current sort will make no difference. (Only perhaps a different physical construction of the chip may make it very-very hard to copy, but that possibly needs some research, ... and, certainly, chips that aren't produced by the hands of those who will eventually copy them.)
There is no easy solution against a people who respect no copyrights, and who don't mind (fear) selling a clone under a no-brand while using your own (even visible on an LCD) copyright, and while there is no authority to stop them from doing so.
Only stricter US/EU policies against them (e.g., a serious embargo, etc.) may have some effect over time. Also, a strong campaign to pass the message to people to stop buying illegal copies (as it eventually only backfires into their own economies) may help in the long run.
Until then, good luck!