diff --git a/java/java-impl/src/com/intellij/codeInsight/daemon/impl/analysis/GenericsHighlightUtil.java b/java/java-impl/src/com/intellij/codeInsight/daemon/impl/analysis/GenericsHighlightUtil.java
index 48e10ee31035..718c222a1be3 100644
--- a/java/java-impl/src/com/intellij/codeInsight/daemon/impl/analysis/GenericsHighlightUtil.java
+++ b/java/java-impl/src/com/intellij/codeInsight/daemon/impl/analysis/GenericsHighlightUtil.java
@@ -68,7 +68,7 @@ public class GenericsHighlightUtil {
       for (PsiClassType type : extendsTypes) {
         PsiType extendsType = substitutor.substitute(type);
         if (substituted instanceof PsiWildcardType) {
-          if (!((PsiWildcardType)substituted).isExtends()) {
+          if (((PsiWildcardType)substituted).isSuper()) {
             continue;
           }
           final PsiType extendsBound = ((PsiWildcardType)substituted).getExtendsBound();
diff --git a/java/java-psi-impl/src/com/intellij/psi/impl/source/resolve/PsiResolveHelperImpl.java b/java/java-psi-impl/src/com/intellij/psi/impl/source/resolve/PsiResolveHelperImpl.java
index a73436417d44..3f4eba1db48d 100644
--- a/java/java-psi-impl/src/com/intellij/psi/impl/source/resolve/PsiResolveHelperImpl.java
+++ b/java/java-psi-impl/src/com/intellij/psi/impl/source/resolve/PsiResolveHelperImpl.java
@@ -902,8 +902,11 @@ public class PsiResolveHelperImpl implements PsiResolveHelper {
                   PsiType substituted = argResult.getSubstitutor().substitute(typeParameter);
                   if (substituted != null) {
                     Pair<PsiType, ConstraintType> res = getSubstitutionForTypeParameterInner(
-                      superSubstitutor.substitute(typeParameter), substituted, patternType, ConstraintType.EQUALS, depth);
-                    if (res != null) return res;
+                      superSubstitutor.substitute(typeParameter), substituted, patternType, ConstraintType.EQUALS, depth + 1);
+                    if (res != null) {
+                      if (res == FAILED_INFERENCE) continue;
+                      return res;
+                    }
                   }
                 }
               }
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/IDEA110869.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/IDEA110869.java
new file mode 100644
index 000000000000..488d6c70024c
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/IDEA110869.java
@@ -0,0 +1,12 @@
+class A {
+}
+
+abstract class B {
+  public <T extends A> T getA(Class<T> aClass) {
+    return null;
+  }
+
+  void foo(Class<?> aClass) {
+    A a = <error descr="Inferred type '?' for type parameter 'T' is not within its bound; should extend 'A'">getA(aClass)</error>;
+  }
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/IDEA67744.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/IDEA67744.java
index 42b62e9983ed..f0684d55d19e 100644
--- a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/IDEA67744.java
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/IDEA67744.java
@@ -2,12 +2,15 @@ import java.util.List;
 
 abstract class B {
     abstract <T> T[] foo(List<? super List<T>> x);
+    abstract <T> T foo0(List<? super List<T>> x);
     abstract <T> T[] foo1(List<? extends List<T>> x);
     abstract <T> T[] foo2(List<List<? super List<T>>> x);
 
     void bar(List<List<?>> x, List<List<List<?>>> y){
         foo(x)  [0] = "";
         foo1<error descr="'foo1(java.util.List<? extends java.util.List<T>>)' in 'B' cannot be applied to '(java.util.List<java.util.List<?>>)'">(x)</error> [0] = "";
-        foo2<error descr="'foo2(java.util.List<java.util.List<? super java.util.List<T>>>)' in 'B' cannot be applied to '(java.util.List<java.util.List<java.util.List<?>>>)'">(y)</error> [0] = "";
+        foo2<error descr="'foo2(java.util.List<java.util.List<? super java.util.List<java.lang.Object>>>)' in 'B' cannot be applied to '(java.util.List<java.util.List<java.util.List<?>>>)'">(y)</error> [0] = "";
+
+        String s = foo0(x);
     }
 }
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/codeInsight/daemon/GenericsHighlightingTest.java b/java/java-tests/testSrc/com/intellij/codeInsight/daemon/GenericsHighlightingTest.java
index 268c9651a5ad..fb9c28436107 100644
--- a/java/java-tests/testSrc/com/intellij/codeInsight/daemon/GenericsHighlightingTest.java
+++ b/java/java-tests/testSrc/com/intellij/codeInsight/daemon/GenericsHighlightingTest.java
@@ -300,6 +300,7 @@ public class GenericsHighlightingTest extends LightDaemonAnalyzerTestCase {
   public void testIDEA67744() { doTest5(false); }
   public void testIDEA67682() { doTest5(false); }
   public void testIDEA57391() { doTest5(false); }
+  public void testIDEA110869() { doTest5(false); }
   
   public void testJavaUtilCollections_NoVerify() throws Exception {
     PsiClass collectionsClass = getJavaFacade().findClass("java.util.Collections", GlobalSearchScope.moduleWithLibrariesScope(getModule()));