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Highlighting can be a bit janky - I find it works better to choose the word at the end and go backward than to go forward.
Make sure your device is very clean, with a brush or canned air if necessary for the crevices where the IR sensors are. This is less of an issue with the H2O than with some other devices, but still.
You haven't taken it apart and put it back together, have you? If all else fails, yes, see if Kobo support or returning it to your place of purchase can help.
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