The manufacturing of integrated circuits (IC) outside of the design houses makes it possible for the adversary to easily perform a reverse engineering attack against intellectual property (IP)/IC. The aim of this attack can be the IP piracy, overproduction, counterfeiting or inserting hardware Trojan (HT) throughout the supply chain of the IC. Preventing hardware Trojan insertion is a significant issue in the context of hardware security (HS) and has not been considered in most of the previous logic encryption methods. To eliminate this problem, in this paper an Anti-Trojan insertion algorithm is presented. The idea is based on the fact that reducing the signals with low-observability (LO) and low-controllability (LC) can prevent HT insertion significantly. The security of logic encryption methods depends on the algorithm and the encryption key. However, the security of these methods has been compromised by SAT attacks over recent years. SAT attacks, can decode the correct key from most logic encryption techniques. In this article, by using the PUF-based encryption, the applied key in the encryption is randomized and SAT attack cannot be performed. Based on the output of PUF, a unique encryption has been made for each chip that preventing from counterfeiting and IP piracy.