This diversity case arises out of a dispute over ownership of a large and valuable piece of sculpture originally designed for display over the bar of a downtown Los Angeles restaurant. The dispute is between the sculptor of the piece, plaintiff-appellee John Chamberlain, and the operators of the restaurant, appellant, Cocola Associates. Chamberlain brought this action to regain possession of the sculpture.

This case presents an issue of first impression concerning the interpretation of California’s Civil Code section 988 which provides that where there is a conveyance of certain rights to a work of art, the ownership of the work of art is not thereby also conveyed unless there is a writing, signed by the artist or owner, explicitly conveying title. The district court ruled that section 988 in effect created a statute of frauds requiring a writing for any transfer of the ownership of a work of art. Because the district court determined that there was no writing transferring ownership of the sculpture from the artist to the restaurant owners, the district court ruled that the ownership remained in the artist, Chamberlain, and entered judgment in his favor.

Cocola now appeals. It maintains that in fact, the ownership was transferred to it in return for acquisition by Chamberlain’s son of a fifty percent stock interest in the 9 Palms Corporation, the general partner of Cocola. Cocola disputes Chamberlain’s contention that he merely loaned the sculpture to the restaurant. Cocola contends that the district court erred as a matter of law in holding that the California statute requires a writing in order for there ever to be a lawful sale of a work of art. It argues that the statute is designed to apply only where there is a transfer of the intangible rights covered by the copyright laws. It contends the statute operates to insure only that when there is a transfer of intangible rights, the ownership interest remains in the artist or owner unless there is a written conveyance of ownership. Since in this case, according to Cocola, there was an outright sale, there was no transfer of intangible rights and the statute never came into play. Cocola also contends that if the district court properly interpreted the California statute, then it is preempted by provisions of federal law which authorize oral agreements for sale of works of art. Cocola reads such authorization into the open-ended language of section 202 of the Copyright Act which allows property rights to be conveyed along with copyrights only by agreement. See 17 U.S.C. § 202 .

We do not reach the preemption issue, for we conclude that Cocola is correct in its interpretation of the California statute, and that section 988 was not intended to create a statute of frauds requiring a writing for there to be a sale of any work of art in California. The ultimate resolution of this ownership dispute depends on whether the parties did in fact intend a transfer of ownership as Cocola contends, or whether Chamberlain loaned the sculpture to the restaurant, as the artist contends. Because there is conflicting evidence on this issue, we remand for further consideration by the district court.

The California statute in question provides in pertinent part:

Cal.Civ.Code § 988.

On its face, the statute appears to leave ownership rights in the owner or artist only where there is an express transfer of more limited rights. The statute does not, on its face, require a writing in order to transfer ownership rights any time physical possession of the object is transferred. The district court was persuaded, however, by Chamberlain’s argument that the language of the statute literally says, when parsed, that ownership of the physical work of art is to remain with the artist “whenever [a] ... conveyance of any right to ... publicly display a work of art is made by ... the artist who created it ...” The district court concluded:

The district court was faced with a record in which it was not clear whether the defendant restaurateurs were correct in their assertion that a total transfer of ownership was intended, or whether the plaintiff was correct that only a loan was intended. The parties made no written memorial of what interest was being transferred. Faced with this “ambiguity” in the facts, the district court resolved the ambiguity in favor of the artist as, in its view, being more consistent with the legislative intent as reflected in subsection (c) of section 988 which provides that when there is an ambiguity, it should be resolved in favor of the artist. This conclusion, however, has both textual and practical difficulties.

The textual difficulty with the district court’s conclusion is that if the statute were intended to create a writing requirement for sale of art objects, the initial limiting clause, stating the circumstances in which a writing is required, would have been unnecessary. The practical problem with the district court's interpretation is that it calls into question the validity of countless sales of art objects that, according to uncontested affidavits in this record, are routinely conducted over a handshake.

To help resolve the issue we turn to the legislative history. This clearly supports Cocola’s position that the writing requirement was established for the situation in which the parties engage in a transfer of reproduction rights, not a sale or loan of the object itself. The California Senate sponsor of the bill which enacted section 988, recommended that the Governor sign the bill in a 1982 letter describing the purpose of the statute as follows:

Letter of Alan Sieroty dated Sept. 2, 1982 (emphasis added). The law, according to this history, was intended to prevent a person who obtains any of the five enumerated rights in a work of art to claim that by purchasing or acquiring one or more of those rights, the purchaser has acquired title to the art object itself. It was not intended to bar all oral agreements of sale. Nor was it intended to bar a court, in a dispute like this over an oral transaction, from determining the true intent of the parties.

Our interpretation is further buttressed by examination of the federal copyright laws which govern transfers of reproduction rights. 17 U.S.C. § 204 requires that transfers of copyright ownership be in writing. Section 204 provides in part:

A copyright entitles the owner to rights enumerated in 17 U.S.C. § 106 . These parallel precisely the types of transfers set forth in section 988 that trigger the writing requirement. Section 106 reads:

17 U.S.C. § 106 (emphasis added).

Thus, when the California statute is read in conjunction with the federal copyright law and the California statute’s own legislative history, the most reasonable interpretation of the California statute is that where there is an express, written conveyance of one or more of the limited rights listed in it, there can be no accompanying transfer of ownership unless the transfer of ownership is also in writing. Section 202 of the Copyright Act provides that a transfer of ownership of one of those rights does not convey property rights in the object itself. The section states:

17 U.S.C. § 202 . California’s section 988 simply refines this requirement to direct that there be not merely an agreement, but a written agreement before a transfer of property rights may accompany a transfer of copyright rights. Since in this case we are not dealing with any written transfer of copyright rights, there is no requirement under the California statute for a written memorandum of sale of the underlying property rights to the object itself.

The district court was correct, however, in its observation that whether or not there was a sale or a loan could not be determined on the state of the record before the court at the time it entered judgment. Accordingly, we remand for further findings in order to resolve that dispute.

REVERSED AND REMANDED.

. One example of a transfer by operation of law is the transfer of display rights which accompa nies the transfer of ownership of the material object per § 109(c). Note that this right does not automatically follow the rental, lease or loan of an object. 17 U.S.C. § 109 (d).