CPU Fixes - Oracle releases a critical patch update CPU as a collection of patches (security fixes) which are usually cumulative and these are recommended to applied as soon as they are made available.

How to check the current database version -
SELECT * FROM V$VERSION;

Out-of-place path set upgrade - the recommended best practice where you install the patch set into a new separate oracle home. The patch sets are full installation of oracle database software.

In-Place Upgrade -