What is the difference between "Update" and "Upgrade"?

Update - is a program release featuring minor software improvements. Updates for the current software version (for example an update from version 7.10 to 7.11) are provided for any registered customers free of charge.

Upgrade - is a major program release (new version) featuring major software improvements and new functionality. Upgrades are provided for any registered customers free of charge within 6 months after product purchase