Legal Question in Intellectual Property in New York

Your position may or may not be correct - it's impossible to tell without a full discussion of the terms of the contract and how (or if) it was negotiated, and a lot more knowledge both of the nature of the consulting company and the software. Also, even if you're technically correct in your interpretation of the contract, that does not mean that you're entirely out of the woods.

If you'd like to arrange a consultation to discuss these issues, please feel free to get in touch.

Unfortunately, there are no "bright line" tests that can steer you clear of an employee IP transfer contract (and principles of copyright law and ownership in an employment context). In other words, simply because you began the work prior to employment and worked on it during your spare time (the spare time argument is a common argument, but ultimately can often be irrelevant given other factors at play), that may not automatically steer you from harm's way. Some of these other factors include the proximity of the developed application to the actual business of the employer (i.e., is it a case of "apples" and "oranges"), which relates to another factor--whether or not the application could be deemed as incidental to your employment given its scope and purpose.

Rather than acting on an assumption that you are "exempt" you may wish to make the disclosure to your employer, so as to conform to one of the terms of the agreement, but also make clear that you are claiming ownership. If the employer resists, then you may want to engage an attorney to make the case/analysis for you.

I hope this helps and I hope to be of service should the need arise. Best of luck.