If you have the budget of a small nation or the defence department you could probably do this. Remember the specially coded DVD players that were created for the Oscars screeners? Well that is the sort of territory you are heading into.
The big problem is that to copy the data you have to read it, and to read the data you have to read it! There is no way for the USB stick to tell if the process that is reading the data is showing it to the user or writing it to the hard disk. Ignore the USB stick, it is not the issue, the issue is the data. You encrypt your data and you need to write an application to display the data to the user, anything else that reads the file will just see gibberish. Your application, which knows how to decode the data, will be the only way to view the data.
Of course this can be hacked, what can be made by man can be broken by man, but you have just upped the entrance fee. Then comes the trade off, is your data valuable enough to cover the expense and inconvenience to the user of the custom software and is it too expensive for the thief to hack the application?
Of course the application could be copied so you now need to lock the application to the hardware so that the data becomes useless without it. As a USB stick is just a computer on a chip you could build some custom hardware that is required by the application (such as the decryption built into silicon) so that the application cannot be run without the USB stick.
That actually seems to be just what I envisioned. I notice that the PDF files get added as data to a custom PDF viewer which gets in the way of between the viewer and the system. This is pretty much how I would have implemented it except that the error messages are not handled correctly. It stops you printing by making the viewer think that the printer is not connected, the error message is misleading in that it claims that the printer is not available when it really means that you are not allowed to print the document.
However without having one of those to hand I don't know how hackable they are. I am mildly curious as to how this is implemented and wouldn't mind trying to hack one. But I note that they don't publish their prices so I suspect that it is beyond my budget.
From what I've read, it uses a hardware key to limit access to the data. You can actually copy the data onto your desktop, but if your USB isn't plugged in it won't open. I guess the software-side (DRM) wraps around each file and copies the unique serial of the USB drive? So, the data is available only when the serial is detected.
Perhaps the only way you can accomplish this is to destroy the data on the drive after first use, but then it still can be copied before first use, and if you do destroy files after first use, nobody is going to be pleased. Your better off letting people copy it.
The big problem is that to copy the data you have to read it, and to read the data you have to read it! There is no way for the USB stick to tell if the process that is reading the data is showing it to the user or writing it to the hard disk. Ignore the USB stick, it is not the issue, the issue is the data. You encrypt your data and you need to write an application to display the data to the user, anything else that reads the file will just see gibberish. Your application, which knows how to decode the data, will be the only way to view the data.
Of course this can be hacked, what can be made by man can be broken by man, but you have just upped the entrance fee. Then comes the trade off, is your data valuable enough to cover the expense and inconvenience to the user of the custom software and is it too expensive for the thief to hack the application?
Of course the application could be copied so you now need to lock the application to the hardware so that the data becomes useless without it. As a USB stick is just a computer on a chip you could build some custom hardware that is required by the application (such as the decryption built into silicon) so that the application cannot be run without the USB stick.
And that is the best you are going to get.
Did I mention that this could get expensive :)