as with everyone else IANAL - however I strongly suspect following this advice would be really dumb in your situation.

My main job is Security, DR and Compliance - they key with the compliance bit isn't necissarily being inside the rules at all times but making sure that the people who are in a position to enforce them are happy with the approach you take. I've never seen a company that is genuinely 100% compliant and I doubt they exist, so dont aim to be squeaky clean aim to be on good terms with the people who could hurt you.

If you build and demo it to your existing company they almost certainly own it, you *might* be on safe ground to write a paper outlining the customer segment and business model that you are considering however even that might put you on more dangerous grounds.

One of the best responses above was that most successful startups begin by being symbiotic with their original parent - offer them a 20% stake in you in return for forgoing any legal claims about IP and try to leverage their sales team and customer base to launch.

From their perspective this would probably mean:

a) they get to retain their support team (perhaps 2 days a week on the legacy)
b) they get to cut costs (40% salary for 2 days)
c) they get a good (?) business idea and the chance to profit from almost no investment and no risk.

From your perspective this clears away most of the legal issues (get that lawyer before you start this conversation!) and gives you some financial backing. It also essentially gives you a sales function, as a start up you will live and die by them.

If the product takes off and flys you could buy them out in a couple of years... perhaps you could even get that written into the contract.

if not well at least you didnt jack everything you had in and open yourself up to a large personal lawsuite.