How would you suggest that I handle the ownership of software?

Based on these facts, I would say you need help from a patent attorney. What to do depends on what the idea and/or software are worth, and who knows about themt. If the idea is patentable you could quickly file a patent application of your own. Even if the employer files first, you can likely file your own application and oppose his. You might even sue the employer in small claims court. If the software/invention are valuable, it is possible that an attorney might accept some or all compensation on a contingency basis. Obviously, if you do any of these things, regardless of the your outcome with respect to your idea/software, your supervisor will eventually find out and almost certainly will not like it very much. So you may loose your job. On the other hand, if the employer you work for is a large or medium sized entity, they might see things your way if the facts are presented in a strategic manner (a good attorney can help with this aspect as well). Legally speaking, the invention (if any) should belong to you. U.S. patent priority is now on a first to file basis, but first to file means the first *inventor* to file (e.g. one who copies an invention is not entitled to priority). If you have assigned your patent rights to the employer, that assignment usually will not cover unrelated work and inventions conceived/done on your own time away from the workplace (but deciding the outcome can depend on specific details). I could continue, but the gist of all this is that you should first assess (alone or with an attorney who has hands on technology experience) the likely value of the idea/software, and discuss your specifics (the employer, any explicit records or evidence, etc.) with an attorney before deciding on an appropriate course of action. Many attorneys will be agreeable to an initial personal or telephonic discussion in confidence, as a courtesy without charge (you may contact me if you wish). This is one way to get a better handle on your alternatives. One last thing- please use this experience as a lesson that it is important (and much cheaper) to have an attorney help you at the onset of a relationship or endeavor, and that your agreements (contracts)/inventions should be written and given a prior review by your attorney (think analogy to a medical checkup).

Original work done by an employee that is relevant to the business, done on company time, or using company equipment, is usually owned by the employer. As you are a software writer, it is likely that your employer would have a claim on your idea. However, if you can prove that your idea can't be used in the company in the course of normal business or wouldn't be a product that the company could add to its product line, you may have a claim to the work and the copyright.

File a copyright on the software with the US Copyright Office asap. It will be in your name only. It can be done online and for $40.

Article I, Section 8 of the U.S. Constitution provides that, The Congress shall have Power to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries. In other words, the copyright goes to the author and the Patent goes to the inventor. A common law right called shop rights may govern and whether the employee or the employer owns the invention depends on the facts and circumstances of each case. Rights are not universal and vary from state-to-state. Factors include: 1) Employment contracts (an employee may assign all rights to inventions to an employer) 2) The intentions of the parties. Was the employee hired to invent? 3) The nature of the business 4) The nature of the invention 5) The circumstances involving the creation of the invention. Is the invention related to the employee's job function, was it made using the employer's tools, or other resources? In addition, state statutes vary on this subject from state to state. It appears that your employer is most interested in your technology, and it also appears that you are a person who may be stretched financially to push your program forward, particularly, while you are working full-time. Would it be possible for you and your employer to negotiate rights to this technology, and you negotiate a raise plus a position to further develop the technology in exchange for a part interest? I suggest that you seek an initial consultation with counsel to determine more precisely the rights in your state, and a good course to proceed.

Since you don't have a clear agreement in writing, it will all depend on the specific facts and will be difficult/expensive/risky to proceed with confidence and safety.