This is one of a series of questions submitted by attendees of the Copyright, Common Mistakes and Myths Webinar and answered by Laura N. Gasaway, author of Pocket Copyright Guide for Publishers.
Answer: Permission to paraphrase is not what is needed. It is permission to use if the portion used is the length of something for which you would need permission to reproduce. So, assume that the portion you want to use and paraphrase is several pages long and thus is pretty substantial. The paraphrase will be a bit shorter, but still relatively substantial (maybe half the length of the original). In all likelihood, you would need permission for the direct quote (reproduction), but it is a judgment call as to whether you would need to seek permission for the paraphrase. On the other hand, if it is a short quote or paraphrase, no permission would be needed. Of course, you also need to cite the author.
Pocket Copyright Guide for Publishers by Laura N. Gasaway and edited by Iris Hanney contains information vital to the publishing community.