² Vivint waived its Appointments Clause challenge, so we need not remand on that basis. Case: 20-1992 Document: 39 Page: 4 Filed: 09/29/2021 4 IN RE: VIVINT, INC. More than a year later, Alarm.com requested ex parte reexamination of all claims of the ’513 patent. Largely, this request repackaged the arguments raised in the ’091 peti- tion. Alarm.com presented four questions of patentability for the Patent Office to review: J.A. 70. Two of those questions came directly from the ’091 petition. In fact, vast swaths of the ex parte reexamination request copied, almost word for word, the ’091 petition. Compare J.A. 84–125, 132–36, with Alarm.com Inc. v. Vivint, Inc., IPR2016-01091, Paper 1, at 16–57, 64–67 (P.T.A.B. May 24, 2016). For the two other questions, which related only to claim 14, Alarm.com replaced a ref- erence cited in the ’091 petition, Britton, with another ref- erence, Cheng. But it did so only after the Patent Office had addressed Britton in three related IPRs. Based on Alarm.com’s request, the Patent Office or- dered reexamination for all claims of the ’513 patent. It concluded that Alarm.com had raised substantial new questions of patentability despite the prior IPRs: [The Patent Office] notes that the Shetty, Joao, and Garton references are now presented in a new light compared to the earlier examinations and proceed- ings in view of the material new argument and in- terpretation presented in the Request. Accordingly, the use of these references in this reexamination is proper. Case: 20-1992 Document: 39 Page: 5 Filed: 09/29/2021 IN RE: VIVINT, INC. 5 J.A. 982. The Patent Office did not, however, cite § 325 or discuss its discretion under that provision. See J.A. 976– 84. Vivint then petitioned the Patent Office under 37 C.F.R. § 1.181, seeking dismissal of the ex parte reexami- nation. It argued that the Patent Office has authority to deny reexamination under § 325(d) because that statute applies to ex parte reexaminations and IPRs with equal force. It also argued that each factor the Patent Office uses when exercising its discretion under § 325(d) counseled in favor of dismissal. 3 Finally, in Vivint’s view, the Patent Office could not decline to institute IPR based on abusive filing practices, yet grant reexamination on essentially the same facts. The Patent Office dismissed Vivint’s petition, holding that any § 1.181 petition raising 35 U.S.C. § 325(d) must be filed before reexamination is ordered. Based on §§ 304, 305, and 325(d), the Patent Office reasoned that it had no authority to consider petitions filed after reexamination was ordered. While that reasoning drove the Patent Of- fice’s dismissal, the Patent Office also “provide[d] addi- tional comments . . . in order to clarify [its] policy” on several points. J.A. 10847. In a second petition under § 1.181, Vivint sought recon- sideration of the § 325(d) issue. It argued that raising § 325(d) in a petition would have been impossible before ex parte reexamination was ordered, so the Patent Office should not have faulted Vivint for its timing. And Vivint argued that, even if the Patent Office generally lacks au- thority to terminate a reexamination, it had authority to do so in this case under the Administrative Procedure Act 3 Although Vivint purported to discuss factors relat- ing to § 325(d), it actually discussed the eight § 314(a) fac- tors. Case: 20-1992 Document: 39 Page: 6 Filed: 09/29/2021 6 IN RE: VIVINT, INC. (APA). Vivint also claimed the Patent Office acted arbi- trarily and capriciously by applying the same law to the same facts and reaching a different conclusion. The Patent Office denied Vivint’s second § 1.181 peti- tion. It reasoned that, though Patent Office rules pre- vented Vivint from filing a § 1.181 petition before ex parte reexamination was ordered, Vivint could have sought waiver of those rules. Also, the Patent Office rejected Vivint’s APA arguments, viewing them as an attempt to circumvent statutory limits. Likewise, the Patent Office explained how granting ex parte reexamination was not in- consistent with denying IPR. It contrasted the statutory frameworks used to make each decision. And it reasoned that, even if the IPR was denied based solely on § 325(d) considerations, the differences between ex parte reexami- nation and IPR could justify such an outcome. But, like the first petition, the Patent Office’s ultimate decision focused on the timing of Vivint’s petition as the basis for denying relief. J.A. 12217. Ultimately, an examiner issued a final rejection for all claims of the ’513 patent, and Vivint appealed to the Board. The Board affirmed. In doing so, it held that Alarm.com’s request raised substantial new questions of patentability, but it did not address § 325(d). Vivint appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A). DISCUSSION “We review the Board’s decisions under the standard[s] set forth in the [APA].” Alacritech, Inc. v. Intel Corp., 966 F.3d 1367, 1370 (Fed. Cir. 2020). Those standards require us to “decide all relevant questions of law” and to set aside agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706. Our review under the APA is not limited to the four corners of a final agency action; we may also re- view “preliminary, procedural, or intermediate agency Case: 20-1992 Document: 39 Page: 7 Filed: 09/29/2021 IN RE: VIVINT, INC. 7 action[s] or ruling[s]” that are “not directly reviewable” be- fore a final action. 5 U.S.C. § 704. I To order reexamination, the Patent Office must iden- tify a “substantial new question of patentability.” 35 U.S.C. § 303(a). Vivint challenges the Patent Office’s out- come on that score, which is a question of law that we re- view without deference. See In re Swanson, 540 F.3d 1368, 1381 (Fed. Cir. 2008) (“[T]he ultimate question of whether the reexamination is based on a substantial new question of patentability . . . remains a question of law.”). 4 Vivint argues that, because the ex parte reexamination request re- packaged arguments in the ’091 petition, it did not present a new question of patentability. We do not agree. A The text of § 303(a) provides little guidance on the meaning of the word new in the phrase “substantial new question of patentability”: Within three months following the filing of a re- quest for reexamination under the provisions of section 302, the Director will determine whether a substantial new question of patentability affecting any claim of the patent concerned is raised by the request, with or without consideration of other pa- tents or printed publications. On his own initiative, and any time, the Director may determine whether a substantial new question of patentability is raised 4 While the substantial-new-question inquiry may involve underlying fact questions, which we would review for substantial evidence, we see no such questions here. See In re Swanson, 540 F.3d at 1381 (holding the scope of an examiner’s prior consideration of a reference is a ques- tion of fact). Case: 20-1992 Document: 39 Page: 8 Filed: 09/29/2021 8 IN RE: VIVINT, INC. by patents and publications discovered by him or cited under the provisions of section 301 or 302. The existence of a substantial new question of pa- tentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office. (emphasis added). It neither defines the word new nor pro- vides examples of questions of patentability that would qualify as new. The broader statutory context, however, clarifies that a question of patentability is new until it has been consid- ered and decided on the merits. See, e.g., Home Depot U.S.A., Inc. v. Jackson, 139 S. Ct. 1743, 1748 (2019) (“[T]he words of a statute must be read in their context and with a view to their place in the overall statutory scheme.”). The Patent Office has discretion to deny an ex parte reexamina- tion request that raises an argument that has been previ- ously presented to it: In determining whether to institute or order a pro- ceeding under . . . [§ 303(a)] . . . , the Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were pre- sented to the Office. 35 U.S.C. § 325(d) (emphasis added). That discretion would be meaningless if a question of patentability was not new simply because it had been previously presented to the Patent Office. Therefore, more is required for a question of patentability to no longer be new; the Patent Office must have considered and decided that question on the merits. While not binding on this court, the Manual of Patent Examining Procedure (MPEP) supports that conclusion. MPEP § 2242(I) defines the word new in § 303(a) by de- scribing the three circumstances in which a question is not new: Case: 20-1992 Document: 39 Page: 9 Filed: 09/29/2021 IN RE: VIVINT, INC. 9 a substantial new question of patentability as to the claim is present, unless the same question of patentability has already been: (A) decided in a fi- nal holding of invalidity by a federal court in a de- cision on the merits involving the claim, after all appeals; (B) decided in an earlier concluded exami- nation or review of the patent by the Office; or (C) raised to or by the Office in a pending reexami- nation or supplemental examination of the patent. (emphasis in original). In the first two cases, “the same question of patentability” must have “already been . . . de- cided” by the Patent Office, not merely raised to or consid- ered by that office. Id. While the last category does include questions “raised to” the Patent Office, it is limited to ques- tions in “pending reexamination[s] or supplemental exam- ination[s].” Id. (emphasis added). In those cases, the Patent Office is currently considering the question of pa- tentability on the merits, which prevents it from being new. Vivint focuses on another portion of MPEP § 2242(I), which defines the phrase “an earlier concluded examina- tion or review.” It argues that a catchall category in that definition—“any other contested [Patent] Office proceeding which has been concluded and which involved the pa- tent”—includes decisions denying institution. Even as- suming that conclusion, a question must have been “decided in an earlier concluded examination,” not merely raised to the Patent Office, in order to meet § 2242(I)’s plain terms. Ultimately, nothing Vivint points to in the MPEP undermines our holding that a question of patenta- bility is new until it has been considered and decided on the merits. B Alarm.com’s request raised four questions of patenta- bility, and we hold each of those questions was new under § 303(a). In each case, the Patent Office has never consid- ered the relevant question of patentability on the merits. Case: 20-1992 Document: 39 Page: 10 Filed: 09/29/2021 10 IN RE: VIVINT, INC. Vivint’s core argument is that “the invalidity chal- lenges raised in Alarm.com’s reexamination request had al- ready been considered and rejected by the Board in the” ’091 Decision. Appellant’s Br. at 18, 20. But that argument is twice flawed. First, the ’091 petition did not raise two of the four questions of patentability raised in the ex parte reexamination request. In the ex parte reexamination re- quest, Alarm.com challenged the patentability of claim 14 on two bases, both of which relied on the Cheng reference. But neither of those bases had been presented to the Patent Office before. Nor had the Patent Office ever considered the patentability of claim 14 in light of Cheng. That, alone, renders the claim 14 questions new. Second, the Patent Office never considered or decided the questions of patentability raised in the ’091 petition. To be sure, the ’091 petition presented several questions of pa- tentability, two of which were identical to questions raised in the ex parte reexamination request. But the Patent Of- fice may deny institution without resolving any questions of patentability. See, e.g., 35 U.S.C. § 325(d). And that is precisely what the Patent Office did in the ’091 Decision; it relied on Alarm.com’s abusive filing practices to deny insti- tution. The Patent Office did not decide the questions of patentability raised in the ’091 petition. Instead, it found Alarm.com’s serial filing to amount to an abuse of process and, therefore, refused to address the merits of the patent- ability arguments. Thus, we hold the ex parte reexamina- tion in this case was based on substantial new questions of patentability. II Even when an ex parte reexamination request presents a substantial new question of patentability, the Patent Of- fice “may . . . reject the . . . request because the same or substantially the same prior art or arguments previously were presented to” it. 35 U.S.C. § 325(d). Vivint contends the Patent Office abused its discretion and acted Case: 20-1992 Document: 39 Page: 11 Filed: 09/29/2021 IN RE: VIVINT, INC. 11 arbitrarily and capriciously by ordering reexamination, and thereafter, refusing to terminate that proceeding. We agree. A Initially, we reject the government’s argument that § 325(d) decisions are not reviewable. See Appellee’s Br. at 31–33. 5 At base, the government argues § 325(d) decisions are committed to agency discretion based on that statute’s permissive language. But permissive language, alone, does not render a question committed to agency discretion un- der 5 U.S.C. § 701(a)(2). See, e.g., Dickson v. Sec’y of Def., 68 F.3d 1396, 1401 (D.C. Cir. 1995). “As we have held, § 701(a)(2) provides a very narrow exception to the pre- sumption of judicial review, and is applicable only in those rare instances where statutes are drawn in such broad terms that in a given case there is no law to apply.” Hon- eywell Int’l Inc. v. Arkema Inc., 939 F.3d 1345, 1348 (Fed. Cir. 2019) (quotation marks omitted). We are not per- suaded that § 325(d) meets that taxing standard. Accordingly, we review the Patent Office’s § 325(d) de- cision under the APA. See 5 U.S.C. § 706. Under the APA, we must set aside an agency action that is either an abuse of discretion or arbitrary and capricious. Id. § 706(2)(A). Agency action is an abuse of discretion when it “(1) is clearly unreasonable, arbitrary, or fanciful; (2) is based on an erroneous conclusion of law; (3) rests on clearly 5 Under 35 U.S.C. § 303(c), “[a] determination by the Director pursuant to subsection (a) of this section that no substantial new question of patentability has been raised will be final and nonappealable.” The Director does not in- voke that provision here, for good reason. The provision does not apply to a determination that a substantial new question of patentability has been raised, and it does not apply to a determination under 35 U.S.C. § 325(d). Case: 20-1992 Document: 39 Page: 12 Filed: 09/29/2021 12 IN RE: VIVINT, INC. erroneous fact findings; or (4) involves a record that con- tains no evidence on which the [agency] could rationally base its decision.” Honeywell, 939 F.3d at 1348. A decision is arbitrary and capricious when the agency fails to articu- late a “rational connection between the facts found and the choice made.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). B Here, we must set aside the Patent Office’s § 325(d) de- termination. A legal error—the Patent Office’s narrow in- terpretation of its authority to reconsider orders granting reexamination—infected that determination. And, in light of the ’091 Decision, it was arbitrary and capricious for the Patent Office to order reexamination over § 325(d), or, at minimum, refuse to terminate reexamination once Vivint requested it do so. Because the Patent Office should not have ordered reexamination, we vacate and remand with instructions to dismiss.

⁶ The government argues Vivint identified no basis for the Patent Office to use its discretionary power of re- consideration. But avoiding arbitrary and capricious con- duct, see infra at 14–16, is certainly a valid basis for reconsideration. Case: 20-1992 Document: 39 Page: 15 Filed: 09/29/2021 IN RE: VIVINT, INC. 15 Office to order reexamination, and, once ordered, to refuse to terminate it. The ’091 Decision focused on Alarm.com’s abusive fil- ing practices. The Patent Office viewed the ’091 petition as “a case of undesirable, incremental petitioning.” ’091 Deci- sion at 12. And it noted how it regularly denies petitions, both in IPRs and in other post-issuance review proceed- ings, when petitioners “have used prior Board decisions as a roadmap to correct past deficiencies.” Id. The Patent Of- fice did discuss the Board’s limited resources, but only in the context of Alarm.com’s abusive filing practices. Id. at 13–14 (quoting LG Elecs. Inc. v. Core Wireless Licensing S.A.R.L., No. IPR2016-00986, Paper 12, at 6–7 (P.T.A.B. Aug. 22, 2016)). Likewise, the Patent Office focused on Alarm.com’s filing practices when discussing the remain- ing § 314(a) factors. Id. at 9 (noting, when discussing factor 3, that the ’091 petition was Alarm.com’s third petition), 10 (discussing the ’091 petition’s timing, which allowed Alarm.com to use related IPRs as a roadmap to fix deficien- cies). Though the Patent Office ostensibly applied § 314(a) to deny institution, it actually relied on § 325(d) considera- tions for its core analysis. See id. at 11–12 (citing and ap- plying § 325(d)). It reasoned that “allowing similar, serial challenges to the same patent, by the same petitioner, risks harassment of patent owners and frustration of Congress’s intent in enacting the [AIA].” Id. at 12 (citation omitted) (emphasis added). That is the heart of a § 325(d) analysis. And the Patent Office explicitly placed that reasoning within the § 325(d) framework: [I]n making the determination whether Peti- tioner’s current challenges present the same or substantially the same art or arguments as those previously presented to the Office, we may consider whether Petitioner uses information gleaned from Case: 20-1992 Document: 39 Page: 16 Filed: 09/29/2021 16 IN RE: VIVINT, INC. our earlier decisions to bolster challenges it ad- vanced unsuccessfully. Id. at 11–12. Fundamentally, the ’091 decision denying in- stitution relied on a § 325(d) analysis. Rather than learn its lesson, however, Alarm.com con- tinued to engage in abusive filing practices after the ’091 Decision. It copied, word-for-word, two grounds from the ’091 petition—the very petition deemed “a case of undesir- able, incremental petitioning”—into its ex parte reexami- nation request. And for the portions it did not copy, Alarm.com “used prior Board decisions as a roadmap to cor- rect past deficiencies.” ’091 Decision at 12. Indeed, the ex parte reexamination request was a more egregious abuse than the ’091 petition under the same considerations al- ready analyzed by the Board. The ’091 petition was the third filing in a string of “undesirable, incremental peti- tioning” practices. Id. And Alarm.com’s ex parte reexami- nation request was another, fourth iteration of Alarm.com’s abuse of process. It was, therefore, arbitrary for the Patent Office to grant reexamination after denying institution of the ’091 IPR based on § 325(d). The government argues that, because IPR and ex parte reexamination involve different procedures and policies, the Patent Office is free to grant an “undesirable, incre- mental” ex parte reexamination request even after it denies a nearly identical IPR petition that was deemed “a case of undesirable, incremental petitioning.” We do not agree. Our holding today is narrow. Section 325(d) applies to both IPR petitions and requests for ex parte reexamination. Thus, the Patent Office, when applying § 325(d), cannot deny institution of IPR based on abusive filing practices then grant a nearly identical reexamination request that is even more abusive. We see no difference between the IPR and ex parte reexamination processes that would justify such conduct and nothing short of termination of the reex- amination would be appropriate. Case: 20-1992 Document: 39 Page: 17 Filed: 09/29/2021 IN RE: VIVINT, INC. 17 Our ruling today is limited. As the Director notes as part of his argument about the difference in character be- tween the ex parte reexamination regime and the IPR re- gime, there can be a public interest in reexamination that goes beyond the interests, or propriety of behavior, of a par- ticular challenger. That is reflected most expressly in the statute’s grant to the Director of the authority to launch an ex parte reexamination “[o]n his own initiative.” 35 U.S.C. § 303(a) (“On his own initiative, and any time, the Director may determine whether a substantial new question of pa- tentability is raised by patents and publications discovered by him or cited under the provisions of section 301 or 302.”); see 37 C.F.R. § 1.520 (providing for Director’s “own initia- tive” authority). Section 303(a) makes clear that the Direc- tor’s “own initiative” authority provides a separate, supplemental path to an ex parte reexamination, beyond the § 302 “request” path, even where there is a § 302 re- quest: the statute, as amended in 2011, expressly permits a Director’s “own initiative” decision to rely on information supplied in a request “under the provisions of section . . . 302.” 35 U.S.C. § 303(a); see SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1355 (2018) (“In the ex parte reexamina- tion statute, Congress embraced an inquisitorial approach, authorizing the Director to investigate a question of pa- tentability ‘[o]n his own initiative, and at any time.’ § 303(a).”). Notably, too, the second sentence of § 325(d), the basis for the discretion at issue in this case, does not apply to such “own initiative” authority; it applies only to a “petition or request,” which the Director may “reject” be- cause of serial filings of a challenger. 35 U.S.C. § 325(d). The Director in this case, however, did not invoke the “own initiative” authority. Nor, apart from the “own initiative” authority, did he set forth a reasoned basis for exercising his § 325(d) discretion to launch the ex parte reexamination even accepting that Alarm.com was engaging in continua- tion of its abusive serial filing. Accordingly, we are not holding that the Director may never launch a Case: 20-1992 Document: 39 Page: 18 Filed: 09/29/2021 18 IN RE: VIVINT, INC. reexamination even when a particular challenger has en- gaged in improper serial filing. CONCLUSION While the ex parte reexamination in this case was based on substantial new questions of patentability, we must set aside the Patent Office’s § 325(d) decision under the APA. That decision was an abuse of discretion and was arbitrary and capricious. Therefore, the Patent Office should not have ordered reexamination, or, at minimum, should have terminated the reexamination once Vivint re- quested that it do so. Accordingly, we vacate and remand with instructions for the Patent Office to dismiss. VACATED AND REMANDED COSTS No costs.