What is a Pen Drive?
Pen drive is another term for a USB flash drive.
Etymology
Pen drive is a trademark by Phison Electronics Corp1 filed in 20022.
[...] “pendrive” is actually a registered trademark of Phison and www.pendrive.com [note: link rot] a registered website by Phison.
[...] soon after establishing Phison, it was in early 2001, when one of our customers asked us if it was possible to come up with a USB flash drive. We didn’t hesitate at all and took up his order. We proceeded as follows: we took the compact flash, changed the firmware of the USB card reader controller and voila it became the world’s first single chip USB flash drive, accomplished only within 2.5 months.
K. S. Pua - The Engineer Behind Pen Drive [https://www.crazyengineers.com/founders-circuit/ks-pua-inventor-of-pen-drive] (accessed 2025-01-11)
Unfortunately, I couldn't find conclusive information about why a pen drive is called a pen drive. I speculate that "pen drive" is called a "pen drive" because it's designed similar to a pen, with a protective cap. Although pen drive's website is no longer available, I managed to access it via the Internet Archive's Wayback Machine.
If you want to transfer data from one computer to another, what do you do? Do you take one or more boxes of floppy disk [sic] with you or do you take your hard drive with you? You may send e-mail, but it takes a lot of time to download if you have a large amount of data.
Now, here is a solution, the Pen Drive. Accessing and transporting data has never been easier with the Pen Drive. The Pen Drive is a USB FLSAH MEMORY DRIVE [sic] and can support up to 1GB disk space, which is 708 times more than a 1.44MB floppy disk. The Pen Drive is a plug and play device, just simply plug into any USB port and the computer will automatically detect it as another removable drive. Now you can read, write, copy, delete and move data from your hard disk drive to the Pen Drive or from the Pen Drive to your hard disk drive. You can even play MP3 files, run applications or view videos directly from the Pen Drive and a lot more…..
The Pen Drive is a USB interface non-volatile disk, driver free flash memory storage device. It can support up to 128MB now and 256MB at the 3Q of 2001.
https://web.archive.org/web/20010807130041fw_/http://www.pendrive.com/page_03.htm (accessed 2025-01-11)

It's worth noting that there there is a USB flash drive patent with a "retractive" connector design that is also similar to a pen, however this was patented in 2007, much after Phison's pen drive.
Thus, USB flash drive pen in addition to provide standard USB flash drive, the mechanical design is clearly for high-volume, low-cost, easy to fabricate, and manufacturing ability for manufacturer. The fashion outlook and colorful pen intends to draw attention, curiosity and attraction to users. With a distinctively deploying and retracting functions and cute outlook, the new USB flash drive pen has many advantage features. It feel light, smooth, and comfortable when a user holds it because the case and cover material are plastic. The pen is short that user could easily put it into user dress's pocket. In use, it is more like a pen such that a user does not have to open the cover, simply pressing the end button for deploying and retracting the USB plug connector.
https://patents.google.com/patent/US8014130B1/en (accessed 2025-01-11)
References
- https://en.wiktionary.org/wiki/pen_drive (accessed 2025-01-11) ↩︎
- https://trademarks.justia.com/763/56/pen-76356330.html (accessed 2025-01-11) ↩︎