That bug has been described on https://launchpad.net/distros/ubuntu/+source/gedit/+bug/34629

"1) Select some text.
2) Click somewhere on the document.
3) Click mouse wheel.

Text should be pasted like it works elsewhere in X. However, nothing is pasted in gedit.

Ctrl-C, ctrl-V copy-pasting seems to work within gedit. Using gedit on Breezy.
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> Thanks for your bug. Does it work with other applications? The clipboard is an xorg feature so it's likely to be an xorg bug. That's weird because it works fine for me and we didn't get bugs about that
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I am sure it is a bug:
- Copying works in other X programs, even if the original selection is no longer selected (eg. gnome-terminal, firefox).
- Most users are very used to default X copy behavior, many of my students complain there is "something wrong" with gedit copy
- Making copying work without keeping original selected is obviously usefull in some cases. Losing copy buffer is probably never usefull.
Thus, I think gedit should be fixed to work like other gnome and X programs do.
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I never noticed this behavior, but now that you point it out I think you are right. I tested with xterm and it behaves like you suggest:

launch two xterm, select something in one, click so that the selection goes away, middle click in the other xterm -> text is pasted

In other words the clipboard should not be cleared when the selection goes away.

Note however that this bug comes from Gtk (GtkTextView widget which gedit uses), not gedit."