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MIPS technology mimics one of the safety systems which already exist in the human head. When the head is subjected to an oblique impact, the brain can slide along a membrane on the inner surface of the skull, which reduces the forces transmitted to the brain.
In a helmet with MIPS technology the shell and the liner are separated by a low friction layer. When a helmet with MIPS technology is subjected to an oblique impact, the low friction layer allows a small rotation of the shell relative to the liner. Experimental tests have shown a significant reduction of the forces to the brain.
Accident statistics show that the most common accident occurs in an oblique impact to the head, resulting in a rotation of the head and brain.
The brain is more sensitive to oblique impacts than radial impacts.
However, the helmets are dropped vertically onto the impact surface,
according to the helmet test regulations, resulting in a radial force
to the head. This is why helmets today have good protective properties
for vertical impacts while the protection is not optimized for oblique
impacts.
Here is a video explaining how MIPS works:
http://vimeo.com/10285002