The globalization of Integrated Circuit (IC) design flow is making it easy for rogue elements in the supply chain to pirate ICs, overbuild ICs, and insert hardware trojans; the IC industry is losing approximately $4 billion annually , . One way to protect the ICs from these attacks is to encrypt the design by inserting additional gates such that correct outputs are produced only when specific inputs are applied to these gates. The state-of-the-art logic encryption technique inserts gates randomly into the design  and does not necessarily ensure that wrong keys corrupt the outputs. Our technique ensures that wrong keys corrupt the outputs. We relate logic encryption to fault propagation analysis in IC testing and develop a fault analysis based logic encryption technique. This technique achieves 50% Hamming distance between the correct and wrong outputs (ideal case) when a wrong key is applied. Furthermore, this 50% Hamming distance target is achieved by using a smaller number of additional gates when compared to random logic encryption.