short answer...
yes
Long Answer...
Each upgrade adds certain attack/buff/debuff skills to pets (depending on pet). the final upgrade doesn't incorporate the skills from the 1st.
http://www.scene-and-heard.com/cov/covsig.jpg
Not too long ago, before the pets got another AI tweak in regards to power recharge rates, some players would not use certain equip/upgrades on certain pets such as the Bruiser (to remove his ranged attack) and the Assault Bot (to forego the long animating flame-thrower). To my knowledge most players since the AI changes have not been continuing that tactic.
Triumphant Defenders Forever
Psylenz FF/Psi, ArticQuark Storm/Rad, Symon BarSisyphus Bots/psn, Max VanSydow Thugs/Dk, Cyclone Symon Bots/stm, Blue Loki Ice/Cd, Widow 46526
HelinCarnate:OMG it is so terrible. I have the option to take 3 more powers but no additional slots. Boo F'ing hoo.
KK, thanks for the replies, needed to be sure 
@Global: Difficult One
Playing on European Servers (Union, Defiant)
If a person turns down an idea, he turns down an opportunity to evolve himself
Hi everyone,
Will it be necessary to use both upgrades when you have the second pet upgrade? Ya know, will I for example need to use both Equip thugs and Upgrade Equipment when I have Upgrade Equipment in order to make my thugs use all possible powers?
@Global: Difficult One
Playing on European Servers (Union, Defiant)
If a person turns down an idea, he turns down an opportunity to evolve himself