Melee attack damage inflicted upon the wearer is reduced by 1 point per attack. This item affects melee attacks, it does not mitigate wholly magical attacks, ranged attacks, nor “attacks” made outside of combat.
If a melee attack deals both physical damage and has a secondary effect (e.g., paralysis, sleep, Poison, ennui), as long as all of the physical damage was negated, this ioun stone will negate both the physical damage and secondary effect(s).