The U.S. Bayh-Dole Act of 1980 allows universities and other non-profit institutions to have ownership rights to discoveries resulting from federally-funded research, provided certain obligations are met. These obligations include making efforts to protect (when appropriate) and commercialize the discoveries, submitting progress reports to the funding agency, giving preference to small businesses that demonstrate sufficient capability, and sharing any resulting royalties with the inventors.

As required by 37 CFR 401.14(f)(2) and other funding agreements, any employees and researchers at the University of Michigan using or accepting resources of the University automatically agree, even without signing any other agreement:
(a) to disclose promptly to the Office of Technology Transfer (OTT) in one of the manners identified in its website each subject invention made with resources administered by the University or as otherwise required by Section III of the Technology Transfer Policy; (b) that they hereby assign to the University the entire right, title and interest in and to each invention, including the patent rights on the invention, made under such funding or resources; and (c) to execute all papers necessary to file patent applications on such inventions and/or all papers required by law (e.g., Bayh-Dole). 

Invention disclosures to OTT, particularly for federally-funded inventions, must meet the federal Bayh-Dole regulations. Those regulations require the University and inventors to “disclose each subject invention to the Federal Agency within two months after the inventor discloses it in writing to contractor personnel responsible for patent matters. The disclosure to the agency shall be in the form of a written report and shall identify the contract under which the invention was made and the inventor(s). It shall be sufficiently complete in technical detail to convey a clear understanding to the extent known at the time of the disclosure, of the nature, purpose, operation, and the physical, chemical, biological or electrical characteristics of the invention. The disclosure shall also identify any publication, on sale or public use of the invention and whether a manuscript describing the invention has been submitted for publication and, if so, whether it has been accepted for publication at the time of disclosure. In addition, after disclosure to the agency, the Contractor will promptly notify the agency of the acceptance of any manuscript describing the invention for publication or of any on sale or public use planned by the contractor.”