Abstract：While patent subsidy policy ushers in a new era for patent applications,it is also being blamed for ''inducing junk patents.'' A review of the policy's operation over the last several years highlights the reasons for attributing questionable patents to the policy.First,patent subsidy policy is not in alignment with the patent system in China.It ignores the shortcomings of China's preliminary examination system and subsidizing utility models and designs without substantive examination.Next,patent subsidy policy lacks a screening system for examining patentability.A generalized subsidy without quality control inevitably leads to junk patents.Finally,the patent subsidy amount is not properly specified.The appealing profit margin distorts the original intention of patentees and lures speculators to abuse the system by using patent applications as a means to turn a quick profit. Patent subsidy policy can get out of the predicament through two routes.The first is to learn from the practices of other countries that restrict the exercise of unstable patent rights with search reports and require a patent evaluation report as a part of the subsidy application.The ''official patent quality certification'' by China's State Intellectual Property Office featuring more thorough examinations can effectively curb questionable patent applications and squeeze out the bubbles in patent applications and grants.The second is to employ the science and technology search system,and use it so that it is the only way to subsidy application.Through systematic,objective and accurate literature searches and informatics evaluation,the science and technology novelty search provides an evaluation foundation for patent subsidy and rejects low value patents from accessing patent subsidies,thus effectively uprooting ill-intentioned subsidy applications. Regarding the procedural design,the relevant supporting systems need to be more detailed.First,patent subsidy application materials must be increased.Subsidy applicants should be required to submit patent evaluation reports or science and technology novelty search reports,as well as the corresponding payment vouchers,so that subsidy examination bodies can evaluate the authenticity and patentability.Second,the duration of patent subsidy application needs to be extended.The time required for patent evaluation reports and science and technology novelty search reports should be included within this process.Third,the patent subsidy amount should be substantially increased.Not only should the costs of patent evaluation report searches and science and technology novelty search be included,but the subsidy for valuable,quality patents should be significantly increased so as to attract valuable technological solutions to the patent application procedure. By implementing the patent subsidy policy,the government intervenes in science and technology with administrative subsidies,which,together with market regulation,serves as a structural incentive.However,the superficially prosperous patent landscape has deviated from its main purpose of advancing science and technology through incentive regulation.Therefore,it is not only imperative,but urgent that an examination of the problems of the current patent subsidy method be carried out.This paper focuses on optimizing incentive mechanisms,with the aim to integrate science and technology resources,increase incentive efficiency,and overcome the patent regulation failure.With patent value as the evaluation benchmark,a sound strategy for patent subsidy policy is to limit subsidy coverage and subsidize quality patents.Through such reforms,government regulation on patents can be put back on the right track so that the government can facilitate the development of science and technology and increase economic strength.