How this works is that Apple will use electrically conductive inserts within the chassis of the device, like the iPhone for example seen in the diagram above. The wording “iPhone” could be used to hold anywhere between 3-8 insulated connections which can then be paired with the electrical circuits, thus completing it.
Sensors are another possibility that could be embedded into the logo or the wording. It can be used to monitor things like your heart rate and could potentially be used as a fingerprint reader as well. Given that Apple is rumored to do away with the home button in future iPhones, this could be a way of embedding a fingerprint sensor into the iPhone without needing to build an extra button.
That being said the patent was filed back in 2013 and to date we haven’t seen the fruition of the idea, so it is possible that it might just have been a good idea or maybe one that Apple does not plan to use at the moment.