I guess he was taking seriously the demand that he "couldn’t even trade under the same name", and the USB drives do feature his brand rather prominently.
I don't see why trading under the same name would be an issue. Not that I'm educated in the area. But just because some lawyer told him he couldn't, doesn't mean it is fact. I think he should have kept going with the usb drives. And even if he did feel he needed to change names, he could've ....changed names! And still kept up with the import and sale of the usb drives. The article doesn't really explain why there was a complete halt to the business.
I'm guessing this was a case of big company doesn't really want to sue a 16-year-old entrepreneur, they just want him to cease all operations. Sure, he could have changed his company name and sold another product, but that product couldn't have been the USB drive given the rather prominent branding on them.