An Update is simply a later issue of the same version and is usually indicated by either a different date stamp in the Help > About menu or a decimal point change to the version number such as from v11.01 to v11.02 then v11.03 etc. Updates usually contain the same features but with minor improvements or bug fixes. These are usually provided free of charge to users for a set period of time or as part of an annual subscription fee.
An Upgrade is an improved and later version of the same product. It is usually indicated by a completely different full version number such as v11 then v12 then v13 etc. Upgrades usually contain more features or better implementations of existing features or are built to run on newer operating systems and hardware. They are typically purchased at a lesser price than if you were to purchase a new license outright.
A Trade-in is when you change a lesser product for a more capable one of the same brand. For instance from RealCAD Draft to RealCAD Pro. With some products you may receive as much for your current software as you paid for it, whilst for others you may receive nothing. The age of the software you are trading in and whether you have been paying yearly maintenance on that software may also influence its value.
A Cross-grade is when you change your current brand for a different brand and are offered a discount to make the change. For instance from AutoCAD LT to RealCAD LT. You will need proof that you are licensed with the competitors software and the vendor may ask that you rescind your current End User License Agreement (EULA) before issuing you with a license for the new one. The age of your current software may influence its value.
In all cases above you not adding another license - you are merely changing an existing user license from one product to another. Most products' EULA do not allow you to on-sell or transfer your license to someone else, whilst others allow you to do so with a fee payable to the licensor.
Contact us directly so we can advise you because each CAD software product has different update, upgrades, trade-in and cross-grades options.