A government panel on judicial reform will consider a proposed revision to the Code of Civil Procedure that would allow oral arguments on patents and other intellectual property rights to be held behind closed doors in court, panel sources said Monday.

The Office for Promotion of Justice System Reform, led by Prime Minister Junichiro Koizumi and comprising 18 Cabinet ministers, hopes to prevent secret business information from being leaked in courtroom hearings, they said.

The panel hopes the revision will protect Japanese firms' intellectual property rights and boost their global competitiveness.

The panel will set up a group of experts this fall to study the proposal. It hopes to reach a conclusion by the end of 2004, the sources said.

In 1996, when the Diet revised the Code of Civil Procedure, interested parties asked the Diet to allow oral proceedings on intellectual property disputes to be held in private.

But the requests were turned down on the grounds that closed-door hearings may violate Article 82 of the Constitution, which stipulates trials be conducted publicly.

The article creates an environment in which companies may refrain from suing those who steal their secret intellectual properties due to concerns that filing a lawsuit may lead to making the secrets or inventions public, the sources said.

And if a victim of such theft does sue, it may ultimately lose the case by not being able to fully substantiate claims that intellectual property was stolen, they said, pointing out that victims must maintain a wall of secrecy when confronting their rivals, often to the victims' detriment in court.

The Japan Federation of Bar Associations is likely to oppose any revision that could violate the Constitution.

The government panel will consider allowing closed-door hearings in cases involving corporate secrets in an apparent response to a report released earlier this month by the government's Strategic Council on Intellectual Property that says public hearings may damage the interests of corporations by allowing their business secrets to be divulged.

However, critics of the report believe adequate protection already exists under the current law.

Even under the current Code of Civil Procedure, according to the critics, a company can restrict third parties from inspecting sections of a court's hearing records that contain descriptions of the company's secret intellectual properties.

The panel will also consider changing evidence-gathering procedures by, for example, requiring parties involved in litigation to submit documents containing company secrets to the court, thereby avoiding having to make them public.

And in order to conclude cases more swiftly, the panel will also look into whether it is practical to entrust the Tokyo High Court to try all appeals against district court rulings on patent infringement lawsuits, they said.