Who owns the intellectual rights for the newly developed software if it was developed during the employee's free time? The developer was 1) working as full-time employee at university X in Western Europe and 2) there was no funding supporting development of this software either directly or indirectly. 3) the software capabilities fall into a general professional area of the employee and employment. 4) there is only one developer of the software.
Like Simon W said, it depends on the contract who owns the copyright. This document about software copyright explains it quite clearly:
Generally speaking, the programmer who writes the program owns the rights. Where there is more that one programmer, the Directive provides for co-ownership.
There is one major exception: where the programmer creates the program in the course of employment, the employer owns the rights, unless there is a contrary agreement between the programmer and the employer. (The programmer will nonetheless retain the so-called "moral rights": see section H of the briefing paper entitled Software Copyright and the Computer Programmer.)
The contract could contain something like (as discussed in this related question):
I confirm that any designs, programs, software, discoveries, ideas, improvements, or any other intellectual property or proprietary information of any kind developed by me while employed by [company] shall vest in [company] immediately upon creation and shall remain the property of [company], and I shall have no financial, ownership, moral or other rights of any kind in such intellectual property or proprietary information.
In that case, the copyright is theirs, however I doubt that a university will put this in a contract.
The developer should check their contract of employment. Usually, what they do in their free time should be theirs - but some companies do try to claim ownership of everything that their employees produce.
If there is nothing in the contract of employment (or other agreement) stating otherwise, then the developer owns copyright on their work.
NB I am not a lawyer, this should not be considered as legal advice.