You do not need to have a previous version of the product on your computer in order to install the upgrade.
The upgrade is a full version of the product at an upgrade price.
Probably said already, but I will repeat for re-enforcement.
Photoshop Elements as well as Premiere Elements are standalone programs.
There is no upgrade as in the sense that the Photoshop (more expensive line) has used the term Ungrade. "Upgrade" when it comes to Premiere Elements is a pricing break related term, typically at Adobe. If you have purchased an earlier version of 12 and you are buying 12, then you will be offered a lower price for 12 than if you have never purchased the product before.
Whether you are in the Photoshop Elements Forum (where Photoshop Elements questions should be posted) or here in the Premiere Elements Forum (for video editing questions), the answer to your question would be the same.